Bharat Bharai Udyog Nigam Ltd (BBUNL), a Union government enterprise and the erstwile holding company of Jessop, will continue to hold about 27 per cent shares of Jessop and the rest will remain with the institutions and individuals.
The handover ends a battle sparked off on February 27, 2002, when Ruia Cotex was awarded the company as part of the governments disinvestment process. Ruia Cotex had emerged as the highest bidder and bagged the company for Rs 18.18 crore.
The sale was challenged in court by the Jessop Staff Association, which questioned the entire sale process, Jessops valuation and its sale to a defaulter of bank loans.
In uproar that followed, the government was forced to admit in Parliament last year that the disinvestment policy did not bar the sale of a company to a defaulter of bank loans.
On March 28 this year, a judge of the Calcutta High Court set aside the sale of Jessop to Ruia Cotex Ltd and directed the Board for Industrial & Financial Reconstruction (BIFR) to file a new revival scheme scheme within three months. However, this order was again set aside on May 19 by a division bench of Calcutta High Court.
Later, the Supreme Court also declined to grant a stay on the Jessop disinvestment. Jessop is the first instance of a government company under the BIFR being sold to a private party. Ruia Cotex, as the joint venture partner of Jessop with the Union government, has been entrusted with the responsibility of implementing the snactioned revival scheme.
The Ruia Cotex chairman, Mr PK Ruia, said that a complete turnaround of Jessop will be carried out successfully by its skilled and competent employees under the leadership of
professional managers with defined goals and targets. According to him, the new management will now focus on restoring Jessop to its position of prominence in the atlas of Indian engineering enterprises.
Jessop was known to be the pride of India for its excellence in engineering. Even now, it is regarded more as an institution than an industrial unit. Jessop will be managed by a competent team of professionals having thorough knowledge about the needs of the company, Mr Ruia said.
When contacted, the Jessop Staff Association general secertary, Mr Aloke Brahmachari, said since the Supreme Court has refused to grant a stay on the sale of Jessop, we had no other option but to accept it. If the new management is serious about restructuring the company and if they seek our cooperation, we will cooperate with them, he said.
However, Mr Brahmachari maintained that the disinvestment policy of Jessop persued by the Union government is faulty.
Set up in 1788, Jessop is one of Indias oldest companies and has four segments cranes and structurals, electromotive units (EMUs) for the railways, road plant, and mining and haulage equipment.
It had reported a loss of Rs 47 crore for the year to March 31, 2002 and had accumulated a loss of Rs 351 crore on a paid-up equity of Rs 95 crore.
Jessop continues to manufacture high quality EMU coaches, wagons, cranes, heavy duty container handling equipment and machineries for road construction, paper and mining industry in its works at Dumdum near Kolkata.