The Hindu Business Line : AAIFR stays Dunlop rights allotment

Kolkata. July 19 The allotment of shares of Rs 27 crore rights issue by Dunlop India is in limbo due to a stay order issued by the Appellate Authority for Industrial and Financial Reconstruction (AAIFR). In a recent order, AAIFR stayed the Board for Industrial and Financial Reconstruction (BIFR) approval to Dunlop rights issue, de-materialisation and trading of Dunlop shares in stock exchanges.

Talking to media persons after the annual general meeting of the company here on Thursday, the Dunlop Chairman, Mr P.K. Ruia, said that the AAIFR stay order came in the wake of a petition by Life Insurance Corporation of India (LIC) to SEBI which in turn approached the AAIFR seeking a reversal of the BIFR order.

LIC stakes

As on March 31, 2007, LIC held 9.05 per cent of a total Dunlop equity capital of Rs 44.98 crore.

It may be mentioned that the BIFR, in its ruling on March 16, has allowed the company to go for a 5:3 at par rights issue of 2.7 crore shares of Rs 10 each by 15 April 2007.

The company was also exempted from compliance of the requirements under the acts and regulations formulated by Securities and Exchange Board of India (SEBI) for such issue. BIFR also ordered the stock exchanges, including BSE, to lift the suspension on trading of the shares of Dunlop India.

“Following the BIFR order we opened the rights issue on April 2. Midway through the issue, we received a request from LIC to keep it open to help them participate in it. While we were weighing the feasibility of the proposal (from LIC) vis-À-vis the BIFR ruling, LIC lodged a complaint with SEBI,” Mr Ruia said.

Investment

On the investments in Dunlop, Mr Ruia said that a total of Rs 260 crore is already invested in the company over and above the acquisition costs.

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