Jamshedpur, Jan. 6: Tata Steel bagged the ailing cable-maker, Incab Industries, with the Delhi High Court rejecting the basic opposition of competing bidder, RR Kabels.
Double bench of Delhi Court in a verdict on Wednesday ruled that Tata Steel is the best bidder and is capable of running Incab Industries Limited, Jamshedpur.
Bench comprising of Magistrate Ravindar Bhatt and RK Gauba during a hearing at Room No. 5 of the court made their verdict in favor of the Steel major after RR Kables proposal was rejected.
Soon after the verdict was made that Tata Steel would run Incab, employees of the company along with Intuc leaders celebrated Holi in front of the company gate in Cable Town. This judgment has come after seven months when High court upheld the decision on May 27, 2015. Pegasus Assets Reconstruction Company of Mumbai moved out of the race and during the judgment on Wednesday, January 6, Tata Steel was judged best and considered over RR Kables.
To take over the cable company hearing was completed on 27 May, 2015. During the hearing at Delhi High Court, Tata Steel and Operating Agent State Bank of India�s side were heard. During the hearing, from Tata Steel�s side it was said that company is willing to take over and run Incab.
Appellate Authority for Industrial and Financial Reconstruction (AAIFR) and Board for Industrial and Financial Reconstruction (BIFR) upheld the decision and validated it. During the same hearing, State Bank of India (SBI) said no proposal is better than that of Tata Steel. Earlier also SBI was in favour of Tata Steel. High Court after the hearing had upheld the decision.
As Tata Steelhas acquire Incab, the cable manufacturer, steel major is set to enter into the cable business in a big way.
In December 2009, the Board for Industrial and Financial Reconstruction (BIFR) approved the revival plan proposed by Tata Steel over two other bidders.
Once a major cable producer and owned by Kashinath Tapuriah, the brother-in-law of M.P. Birla, Incab in its heydays employed nearly 2,000 people in Jamshedpur. In the mid-1990s, Malaysia-based promoter Leader Universal Holdings Berhad took over, but the company slid deeper in the red. It was referred to the Board for Industrial and Financial Reconstruction in 1999, a year before Jharkhand�s birth.
Tata Steel in 2011 was considered the best bidder and new owner of the sick cable manufacturer Incab Industries by the Appellate Authority for Industrial and Financial Reconstruction (AIFR) in a selection process in which both RR Kabels and Pegasus also participated.
Earlier, Tata Steel had decided to move court in the interest of the workers and at the request of the Incab unions.
During the proceedings at the Delhi High Court, Incab workers had filed an application pleading that Tata Steel should be directed to submit a revival scheme for the sick firm.
Subsequently, Tata Steel was asked by the Delhi High Court to submit its proposal. After several rounds of hearing, the ruling of the BIFR went in favour of Tata Steel. Incab Industries, cable producer of yesteryears, has a plant located on approximately 176 acres of sub-leased land adjacent to Tata Steel in Jamshedpur, a manufacturing facility in Pune, and assets in Kolkata. However, its manufacturing activities have been in a state of suspension for the past 16 years.
Considering the strong domestic demand for cables in the power sector, overseas cable manufacturing giants have entered into the market through joint ventures with Indian cable manufacturers for manufacturing Extra High Voltage (EHV) cables and special types of cables.
Significantly, in Nov. 1999- Incab referred to BIFR. In May 2009- Delhi HC recommended names of three bidders; Tata Steel, RR Kabels and Pegasus. In Oct. 2009-Operating agency SBI recommends Tata Steel�s name as the next promoter.
In Dec. 2009- BIFR asks Tata Steel to take over Incab. In Jan2010- RR Kabels move Appellate Authority for Industrial and Financial Reconstruction (AAIFR) challenging BIFR. In Nov. 2014- Supreme Court directs Delhi High Court to dispose of Incab�s revival issue within three months. In Jan2016-Delhi High Court rules decision in favour of Tata Steel to take over the company.
After the aforesaid long protracted litigation before the BIFR, AAIFR, Delhi High Court and Supreme Court, finally the proposals of the aforesaid three bidders, namely, RRK, Tata Steel and Pegasus were considered by OA twice and BIFR for evaluation.
By order dated 9.12.2009 BIFR concluded that out of the three schemes, the revival scheme submitted by Tata Steel Ltd. was the best and by order dated 30.06.2011, the Appellate Authority i.e. AAIFR confirmed the order of BIFR.