Unknown fate for Cement Corp factories

Unknown fate for Cement Corp factories
25 October 2004

Despite a history of riots, worker deaths and a clamour for voluntary redundancies, Indian state government is unmoved to privatise three factories of Cement Corporation: Dala, Chunar and Churk . The three loss-making factories hit headlines in 1991 when the then Mulayam government had made an abortive bid to sell them in private hands. About nine workers were killed in police firing during an angry protest in Chunar forcing the then government to scrap the deal.

 A lock-out was declared in 1996 when losses crossed over Rs 200 crore. The matter went to the court and the high court in its order dated December 12, 1999 appointed a liquidator and allowed the state government to wind up Cement Corporation under Section 529 A of the Company Act.  Then Rajnath government took a cabinet decision to sell Dala and Chunar factories. Tenders were floated on February 2, 2001 and Grasim Industries offered Rs 241 crore to revive the plants. But instead of moving an application under Section 466 of the Company Act for seeking permission from the HC, Section 446 was used

Besides Grasim, there are two other buyers -- Jai Veer Cement (for Churk) and Lafarge that have made an ad hoc bid for buying all three units for Rs 272 crore. Moreover, about 3500 out of 4500 employees are ready to take VRS to make it a smooth deal for private bidders," points Basudeo Narain, a leader of employees’ union.

Published under Cement News