In the annexure to the lockout notice, Ralliwolf director BK Sharma stated: "The union committee members and the workers paralysed the entire manufacturing acitivity in the factory premises. They also did not allow the materials to move out to the factory premises. As there is a great apprehension of breach of peace and danger to the lives of the other employees and gross damage to the property of the establishment, the management was constrained to put up this notice of lockout."

The Ralliwolf Officers' Association, however, denied the charges and dubbed the management allegationas "a pretext to forcibly close down the facility after the company got into a financial mess". Term-lending institution ICICI is currently conducting an internal audit at Ralliwolf, a pioneer in portable tools and part of the Rs 500 crore HM Podar group at the direction of Appellate Authority of Industrial & Financial Reconstruction (AAIFR).

According to a senior manager at Ralliwolf, intervention of the AAIFR was subsequent to appeals made by the trade unions alleging financial irregularities and mismangement by the Ralliwolf brass. "The management wanted to refer the company to BIFR and reap the benefits of a BIFR concessions," the official said.

Sources in ICICI investigating team said: "We are unable to undertake audits as the mangement is not co-operating with us. We have written to the AAIFR about our difficulty in undertaking the task and meet the deadline."

The Mulund factory apart Ralliwolf has another smaller facility at Ahmednagar which employs about 150 workers. Ralliwolf was initially ajoint venture between Rallis India and Wolf of the US. In 1991 the Podar group bought out the 79 per cent stake held by Rallis India. Until 1996 the entire production of Ralliwolf was bought by HM Engineering which undertook 90 per cent distribution of the company.