DCA seeks nod for govt director on Dunlop board

Calcutta, March 29: The Department of Company Affairs will seek the Company Law Board's approval for appointment of a government director on...

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Calcutta, March 29: The Department of Company Affairs will seek the Company Law Board’s approval for appointment of a government director on the board of tyremaker Dunlop India Ltd under Section 408 of the Companies Act. The DCA’s move was cleared by the finance ministry on March 5 this year.

According to a departmental note, dated March 19 (No 1/112/97-CL.II), R K Arora, the officer who conducted an investigation into allegations against Dunlop, recommended action under Section 408 and the DCA has accepted his views. P Chidambaram, finance minister in the Gujral government, gave his go-ahead for the appointment of a government director on March 5, and an application to the CLB for its approval was being prepared.

The inspection of Dunlop, which is now before the Board of Industrial & Financial Reconstruction, was ordered by the DCA following a complaint received from the workers’ union. The investigation was conducted under Section 209A of the Companies Act by Arora, DII at headquarters.

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According tothe note, the union alleged that there were serious financial irregularities and mismanagement and systematic siphoning off of funds from the company. The union also alleged that "the present management is involved in indiscriminate sale of the valuable properties belonging to the company" by its Dubai-based NRI chairman, M R Chhabria."

The Registrar of Companies, Calcutta, has already issued showcause notices to Dunlop. The company, established in 1926, was taken over by Chhabria in 1984.