Business Daily from THE HINDU group of publications
Thursday, May 31, 2007
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Business Daily from THE HINDU group of publications Thursday, May 31, 2007 ePaper |
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Corporate
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Sick Units Daewoo plant revival hits roadblock again Preeti Mehra
RSC Corporate Services, which had not taken part in the auction process, has been admitted on a conditional offer to pay Rs 900 crore for the assets.
New Delhi May 30 The takeover of the assets of Daewoo Motors India Ltd and revival plans for the plant have hit a roadblock once again. The Debt Recovery Tribunal (DRT) had declared the combine of Crosslinks Finlease, promoted by former Hyundai President Mr B.V.R. Subbu, and SpiceJet's Mr Ajay Singh as successful bidders in the auction for Daewoo's assets in February. But a new contender has entered late in the day, upturning the revival plan. This is despite Crosslinks having paid the initial Rs 76.50-crore deposit. The company was asked to hold back its balance upfront payment of 25 per cent that was due on March 25. Meanwhile, RSC Corporate Services, which had not taken part in the auction process, has been admitted by the Debt Recovery Appellate Tribunal on a conditional offer to pay Rs 900 crore for the assets. The winning bid of Crosslinks Finlease and Mr Ajay Singh was worth Rs 765 crore. The 1,400-odd displaced workers, who had seen a glimmer of hope in the Crosslinks proposal as it had officially committed to revival of automotive manufacturing and redeployment of workers, are afraid that their five-year wait will come to naught. "We will stand by any proposal that aims at a revival of the plant, which is being maintained by us ever since shutdown in 2003," said Mr Ravinder Nagar, Treasurer, DCM Daewoo Employees' Union. "Crosslinks's was the only proposal that planned to make the facility operational. Others have only shown interest in the 200-plus acres that the plant stands on." The workers said that the belated admission of new players after an auction deal has been sealed sets a precedent that could have a fallout on all auction processes. "There could be no end to any auction deal if new players are admitted. If another party comes in committing an even larger amount, will that too be considered?" asked the union's President, Mr Lachhi Singh. While the workers are petitioning the Labour Ministry to intervene in the matter and have placed their case before the President and the Prime Minister in the past, they say that they would be forced to take the agitation route if the plant's revival is stymied once again. Daewoo Motors India Ltd went into liquidation in 2003, and most of its workers have remained out of work ever since. To recover its assets, the DRT, Mumbai, first conducted auctions the same year but failed to receive a response. General Motors, which at one time considered buying the plant, too opted out. After the banks and Customs, both of whom benefit from the proceeds, worked out a sharing formula, the fourth auction brought in Crosslinks in December 2006.
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