Dunlop Md Leads Revolt Against Manu Chhabria

Top executives in Dunlop India, aided by the unions, have raised the banner of revolt against chairman Manohar Rajaram Chhabria. They intend to approach the highest levels in government to demand the removal of Chhabria, who is the single largest shareholder in the Calcutta-based tyre manufacturing company.

The move to dislodge Chhabria is being led by his own appointee, managing director Murli Dhar Shukla.

Dunlop sources said Shukla is trying to rally the support of every section within the company from the top management personnel down to the unions. It is not known whether the entire executive cadre will back Shukla, but the unions, which have been demanding Chhabrias ouster, have assured Shukla of their support.

 

Unions sources told Business Standard: We will back the top executives in their move to strike out independently. Shukla could not be reached for comment.

The revolt appears to have been sparked when Chhabria asked vice president (finance) Anju Mardeka to leave the company after a confrontation with him at a meeting with top executives in Dubai. Shukla, Dunlop sources said, declined to attend the meeting as it did not have an agenda.

Two other key personnel D Mondal, vice president marketing, and M Badrinathan, vice president (industrial products) have also decided to step down in protest.

It is not known whether the Dunlop executives have acted on their own or have been instigated by a corporate raider. Chhabria himself had snatched Dunlop from the RPG group after a hostile takeover in the mid-1980s.

Earlier this year, Chhabria, who holds a 44 per cent stake, had sought to increase his stake to 51 per cent, but the move was foiled by the institutional shareholders.

The rebellion at the tyre major comes at a time when the unions at Shaw Wallace, Chhabrias flagship company, have also started to press for his removal.

Last December, the unions at Dunlop and Shaw Wallace made a joint representation to the finance minister and the Prime Ministers Office seeking the removal of Chhabria.

Although the Dunlop management refused to spell out the exact course of action it intends to take, union sources said a petition could be filed before the Company Law Board and appeals made to the finance ministry.

The rebellion by the Shukla-led management will severely hurt Chhabrias plans in India. Chhabria has been under a cloud over his alleged financial mismanagement of Shaw Wallace.

He is already facing an investigation by both the income-tax department for concealment of income and the Enforcement Directorate for foreign exchange violations.

Dunlop India itself has been in deep financial trouble as banks have refused to increase working capital limits.

The company managed to register a Rs 39 crore net profit after they selling prime real estate properties to a wholly-owned subsidiary for a consideration of Rs 170 crore.