Ruia Group in a fix as bosses of acquired firms step down

Ruia Group in a fix as bosses of acquired firms step down

Kolkata: The Ruia Group, which since 2003 has been buying embattled firms such as railway wagon manufacturer Jessop and Co. Ltd and tyre maker Dunlop India Ltd, seems to be struggling to retain key executives.

Dunlop’s chief executive officer and executive director Damodar Prasad Dani had stepped down in early November at a crucial time when the company was preparing to reopen its Sahaganj factory in West Bengal’s Hooghly district, according to a director, who did not want to be named.

Dani served as Dunlop’s chief executive for about two years and resigned with effect from 4 November. The company’s board was informed of the development only on Monday. Dani has been replaced by Rakesh Kumar Buddhiraja.

Dunlop’s Sahaganj factory was reopened on 2 December after a West Bengal government-owned power utility agreed to restore power supply to the facility.

Dani’s departure from Dunlop follows a spate of resignations at Jessop. Five directors, including a managing director, have quit the firm in the year till June.

In another development, Lodha and Co. has stepped down as external auditor of Ruia Group firm Falcon Tyres Ltd, which manufactures two-wheeler tyres. Lodha was replaced by KN Gutgutia and Co. after an extraordinary general meeting last month.

“Because Dani wanted to move to Delhi, the group agreed to assign a different role to him," said a spokesperson for the Ruia Group, which in 2005 took over Dunlop from Manohar Rajaram Chhabria’s successors. “Dani will remain associated with our group in some other capacity."

On Lodha’s stepping down as the statutory auditors of the tyre maker, the spokesperson said, “It was a decision of Falcon’s board."

Aditya V. Lodha, Lodha and Co.’s managing partner, refused to comment on his firm’s decision to sever ties with the Ruia Group.

Dunlop’s board was informed about Dani’s resignation at a meeting on 28 December, according to the director cited earlier.

One Rakesh Kumar Buddhiraja has been appointed chief executive officer at the 28 December board meeting, he added.

Earlier at Jessop’s annual general meeting (AGM) in July, Pawan Kumar Ruia, chairman of the Ruia Group, had said he was looking to step down from the boards of the two tyre companies so that professionals could run them, and he would focus on expanding the group’s businesses through acquisitions. By then he had already stepped down from Jessop’s board, but chaired its AGM at the request of the firm’ shareholders.

“The key challenge now is to stabilise operations at Dunlop," said the company’s director quoted earlier. “Until it starts producing heavy duty tyres, it won’t be clear what lies ahead."

Dunlop is planning to set up a 50MW power plant at Sahaganj factory, Ruia had said in media interviews earlier this month.

He had also said he was looking to restart trading of Dunlop’s shares on the Bombay Stock Exchange. Trading in Dunlop’s shares was suspended in 2002.