The Madras High Court has appointed a four-member interim board for Best and Crompton (B&C), the ailing city-based engineering company that is being taken over by the Indonesia-based Polysindo group from Vijay Mallya.
The members who constitute the interim board include KVR Balakrishnan (who was also a member of the previous board), former Reserve Bank of India governor and court-appointed administrator, S. Venkitaramanan, V. Srinivasan, who will represent ICICI and senior advocate C.Harikrishnan.
The interim board will look into the company affairs until Polysindo's takeover is finally through.
The Indonesian group is pumping in about Rs.110 crore to revive the company. Much of the investment will, however, go towards payment of dues to banks, FIs and other creditors including employees.
Polysindo has already put the money in an escrow account, and has got FIPB approval for the investment. RBI clearance for the plan is still awaited. While the new promoters convinced banks and other FIs to settle on a revival package which included writing off principal and interest money, the takeover hit a new roadblock when fewer workers opted for the VRS than anticipated by the management. The company wanted to prune the workforce by around 270, but only 170-odd workers opted for the scheme.
However, in the interests of the company, the union has come forward to help the management achieve this target. On its part, the company has come forward to clear all dues including payments due to workers under earlier VRS (in 1994 and 1996) within 60 days of taking over the company.
Meanwhile, the retrenchment petition filed by the management with the labour commissioner has been dismissed with the order that compensation equal to wages be paid to workers for the period during which "suspension of operations" was announced.
This works out to three months wages for workers from May 18, 1997 to August 18, 1997. The B&C units are set to re-open on August 18, considered an auspicious day for the new management.
