Court calls in liquidator to deal with Dunlop India

After years of lockouts, plant shut downs and operative restructuring, the Calcutta High Court has now ordered its Official Liquidator to take possession of all assets belonging to Dunlop India Ltd and to control all further company transactions.

Dunlop India’s representatives appeared before the High Court on 17 December 2015, at which time Justice Sanjib Banerjee confirmed the company’s wound-up status. Dunlop India claimed the company had been granted a Supreme Court stay that protected it against being wound up, however it was unable to offer evidence of this.

Yet despite declaring Dunlop India wound up and dismissing a plan to repay its unsecured creditors (whom it allegedly owes Rs 1.22 billion or £12.5 million) as a “ridiculous scheme” that only exists “for the purpose of prolonging the proceedings arising out of the order of winding-up pending in the Supreme Court,” during the session on 17 December Banerjee offered Dunlop India a final chance to stave off the Official Liquidator. Should the company show “its bona fides” or willingness to repay its debts by depositing a sum of Rs 500 million (£5.1 million) with the Official Liquidator before 22 December, the court indicated that the repayment scheme may be given a chance.

 “In default of such amount being produced in court as deposit, the application pertaining to the scheme is likely to be dismissed without any further consideration,” Banerjee warned.

 The High Court reported on 22 December that the required deposit had not been paid, and the court also confirmed that no Supreme Court stay exists. “Accordingly, CA No. 495 of 2014 and CA No. 496 of 2014, which are the company’s applications for making payments to its unsecured creditors, are dismissed…The Official Liquidator should now proceed to take possession of all books, records, documents, assets and properties of the company in liquidation and take control of its transactions.”

Dunlop India’s parent company the Ruia Group acquired Dunlop India, and with it the Indian market rights to the Dunlop tyre brand name, in 2005. In the years that followed the Ruia Group also acquired a number of European automotive component manufacturers, however the company lacked the funds to realise its plans for these firms. The company fought off the liquidator in 2012, however this time Dunlop India appears to have played its final card.