Swc Plea To Sell Cal Chem, Detergents India Rejected

The division bench comprising Justice U C Banerjee and Justice R K Mitra dismissed SWCs petition on Tuesday. The petition had been opposed by the All India SWC Employees Federation. The court order came on the day Calcutta Chemicals held its annual general meeting in Calcutta.

The Shaw Wallace board had decided that since its business of consumer products was not commercially viable, the interests of all concerned would be ensured if the same was disinvested for a valuable consideration, said counsel for Shaw Wallace Jayanta Mitra, S N Mookherjee and Tarun Aich.

It was stated that on or about March 4, 1996, a memorandum of understanding was entered into between SWC and the German company, who wanted to close the deal by October 16.

 

Sudipta Sarkar, Amit Basu and Swapan Ash, counsel for the All India SWC Employees Federation, had opposed the SWC petition and called it a virtual eyewash.

Earlier, the employees federation had obtained an order from the bench that SWC or its subsidiaries will not make any investment or divestment, borrow or give loan and advance to any of its subsidiaries or to any other concern or concerns an amount exceeding Rs 50 lakh without permission of the court.

SWC had made its application for sale of Calcutta Chemicals seeking modification of that order. The employees application was made challenging the order of Company Law Board (CLB) which refused to pass the order against SWC.

The high court decision will certainly make it a little more difficult for the company to quickly marshal resources for discharging its statutory liabilities, said an official spokesman of Shaw Wallace.

SWC, which controls approximately 55 per cent of Calcutta Chemicals, has run up significant short-term debts and its management had earlier stated that the amount expected from the sale of Calcutta Chemicals and Detergents India will go towards repaying a sizeable portion of the short term debt.