Dunlop India Embroiled in Factory Land Dispute

Dunlop India’s fortunes continue to slide to a new low as the company, on top of the recent cessation of production at its Sahagunj plant, becomes entangled in a land dispute. The quarrel with real estate company VGN Enterprises surrounds a small portion of the 60.86 acre Chennai plant plot auctioned off by Dunlop India in 2004 in compliance with a Board of Industrial and Financial Reconstruction (BIFR) rehabilitation scheme.

The tyremaker claims the land in question could not be sold under the BIFR scheme, however the buyer, VGB Enterprises managing director V N Devadoss, is adamant that any right Dunlop India may have once had to the land has been relinquished. VGB Enterprises paid Rs 234.4 million (£2.96 million) for the parcel of land, and plans to develop the land into an integrated township. Mr. Devadoss has supported his ownership claim with the land’s title deed, court cases settled in his favour and an affidavit filed by Dunlop India in support of the sale of the land to him.

Dunlop India Limited has filed a case against a VGN Enterprises for encroachment into its Chennai factory, and the tyremaker registered a police complaint on July 30. The same day Dunlop India also released a press statement that “miscreants” had stormed into its factory site, demolishing part of the factory compound wall and forcefully claiming a section of the factory land.

“Some 150-odd miscreants stormed the factory site with bulldozers, demolished a part of the boundary walls, uprooted number of trees inside the premises and forcefully claimed a part of the factory land including the raw material storage area to be their property,” claimed the press statement.

Attempts to restart production at Dunlop India’s Chennai facility last August failed due to a wrangle with a power suppler over unpaid bills. Dunlop India previously claimed it intends to operate a 50 tonne per day output from the Chennai facility starting in August 2007. Despite these optimistic plans, the company has been at the receiving end of accusations they have no serious intention of resuming tyre production at the site. These claims have given additional weight by the company’s July 30 statement, which said that the recent incident at the factory site has made all plans [to resume production] look uncertain at the moment.