The Allahabad high court is scheduled to hear the case by early February, which chairman GP Goenka feels is “unjust”. The interim stay on the claim expires on February 28.
In November last year, the Union government had claimed Rs 200 crore from Duncans Industries Ltd as retention support price (also known as subsidy) with retrospective effect from April 1, 2000.
While 11 of the 13 fertiliser manufacturers have paid the government, Duncans and Madras Fertiliser are contesting the government’s claims before the court.
“We are very hopeful of a positive outcome”, Mr Goenka told shareholders at an extra-ordinary general meeting (EGM) convened on Thursday. The company placed before its shareholders a plan to demerge its fertiliser and tea businesses.
The Duncans management has already served a notice on the Uttar Pradesh government that it will be forced to close down the manufacturing unit at Panki near Kanpur in Uttar Pradesh, if the Union government order of November 2001 is not reversed. The management has noted that it will close down the unit by March 2002.
Following the demerger, Duncans Industries Ltd will have the fertiliser unit and will be renamed Duncans Fertiliser Ltd. The tea business will be merged under Duncans Industries Ltd. The company proposes to merge Santipara Tea Co, a few other tea estates and another outfit, Shubh Shanti Services.
Under the scheme, Shubh Shanti will issue one equity share of Rs 10 each to shareholders for every four shares held by them in Duncans Industries. Shubh Shanti will issue one equity share for every eight equity shares held by shareheolders in Shantipara Tea Co.
Post-merger, Duncans and Subh Shanti Services will have paid-up capital of Rs 40 crore and Rs 22 crore respectively. The promoters will have a 73 per cent stake in Shubh Shanti Services and 78 per cent in Duncans Fertiliser.