Workers throw a spanner in Modi Rubber share transfer

NEW DELHI: The decade-old tussle over Modi Rubber by the Modi brothers does not show any signs of a settlement, even with VK Modi winning the bid for acquiring the institutional stake in the company.

In the latest development, the Modi Rubber workers’ union has approached the Delhi HC for a stay order on any share transfer in the company.

The workers’ union has demanded that the rehabilitation process of workers and share transfer should go on simultaneously. Besides, they are also asking for an assurance that the plant, which is shut down for the past five years would start operations again. While the first court hearing happened today, the next court hearing is scheduled for August 1.

MRL union leader Dilbagh Singh told ET, “We are apprehensive that once the share transfer happens (between the FIs and the Modi group), then instead of restarting production at the plant, the property could be sold without any consideration about our lives.” The employees maintain that around Rs 100 crore working capital is needed to put the plant in action , and if the same amount of money is spent on buying shares, no money would be spent on restarting operations.

However, BK Modi said that he is very much interested in buying the shares at Rs 95 per share and investing another Rs 100 crore for starting operations. “What is the point of buying shares if I don’t invest to start operations again,” he said. VK Modi remained unavailable for comment and ET did not receive any reply to the fax sent with queries.

BK Modi, who is currently in Hong Kong, said he would decide on the next course of action after he receives a reply from ICICI Securities. Mr Modi had yesterday shot off a letter to the merchant banker, alleging some violations in the bid and hence asked for a rebidding for MRL.