BRITISH CORPORATION OF INDIA

1. PRESENTATION ON
CONFLICT MANAGEMENT
PRESENTED BY-
GEETA SRIRAM SUNKARA
JAYAT RATHORE

2. KANPUR
•Situatedon the banks of the river Ganga, Kanpur
stands as one of North India's major industrial
centres with its own historical, religious and
commercial importance.
•The city, which was once described as Manchester
of the East, is one of the biggest producers of
textile and leather products in Uttar Pradesh.
•Apartfrom leather and textile industries, fertilizer,
chemicals, two wheelers, soaps, pan masala,
hosiery and engineering industries are also
operating in the city.

3. •The city hosts the world famous Lal Imli woollen
factory, which was once the pride of the State.
•About 50 years ago, Kanpur was at second place in
the country after Calcutta in terms of
industrialisation.
•However, in course of time, the city could not
maintain its glory due to the closure of a number of
industrial units mainly comprising of textiles, iron
and steel, engineering goods, etc.
•Yetin the State of Uttar Pradesh, Kanpur still holds
an important place in terms of concentration of
industries at one place.

4. Cawnpore Woollen Mills Co.
LAL IMLY
 In 1876, five Englishmen — W.E. Cooper, George Allen, Dr
Condon, Bevan Petman, and Gavin S. Jones — set up a mill in
Kanpur, about 400 kilometres east of Delhi, to manufacture
blankets for the soldiers of the British Army.
 Kanpur then had already become a major British cantonment in
north India. The mill, located in Civil Lines neighbourhood in the
heart of Kanpur, was named the Woollen Mills, Cawnpore (as the
British pronounced and spelt Kanpur). Its products were called Lal
Imli (red tamarind), after a tamarind tree that stood in the premises
of the factory and bore reddish tamarind.
 Later, the mill also began making blankets, shawls, wool and other
woollen clothes for civilians. The products became so popular that
the mill also came to be known as Lal Imli.

9. The fortunes of the Lal-imli, continued to score new heights
under the British Regime. It was during the 2nd World War
that the mills were worked to full capacity so as to fulfill the
larger demand of Woolen Cloth for the British Armed Forces
and this was probably the period when Lal-imli achieved
peak performance in terms of production and capacity
utilization.
But by the time the war was over, the writing on the wall was
clear that sooner or later the British would have to leave
India.
The management thus lost interest in the progress and
development of the woolen units and all activities of
expansion and updating of plant and machinery received a
set back. The Indian private management which took over
from the Britishers also did not take any effective measures
towards restoring the mills to their normal health. The
fortunes of the units thus continued to waver.

10. SCENARIO

12. IF A picture is worth a thousand words, then this
photo of. Lal Imli mill , it was this mill that earned
Kanpur the sobriquet ‘Manchester of the East’. At
the main gate, a handful of laid off workers have
been protesting from years. In their quest for
justice.
A few years ago, close to 20,000 people used to
work here. Now there are 1,300. What’s worse is
that these problems had ceased to be an issue
even almost a decade ago.

13. In 1956 when SRI HARIDAS MUNDRA was the
chairman of the company a scam involving the
issue of duplicate share certificates took place
which snow-balled into a major national issue.
The scam took such proportions that it had effects
on the government exchequer and the then finance
MINISTER SRI T.T. KRISHNAMACHARI had to resign,
over the issue.

14. MUNDRA SCAM OF 1957
Life Insurance Corporation of India was influenced by
Finance Minister T. T. Krishnamachari to lend Haridas
Mundra a Calcutta-based industrialist of Kanpur Rs 1 crore
by purchasing shares in his firms with no real standing in
order to boost the prices of those companies in the stock
market.
Feroze Gandhi was credited with having sourced the
confidential correspondence between the then Finance
Minister T.T. Krishnamachari and his finance secretary and
raised a question in the parliament.
Haridas Mundra was jailed for 22 months. The Finance
Secretary was indicted. Finance Minister T. T.
Krishnamachari had to resign earning the reputation as the
first Union Minister of India to step down due to corruption.

15. As a result of the Mundra Scam, the Board of Directors of BIC was
dissolved and a fresh Board of Directors was constituted by the
High Court of Allahabad. Sri H.S. Chaturvedi Retd. Judge was
appointed as Chairman of BIC, and the Vice Chancellor of Banaras
Hindu University became the Vice Chairman.
During the 1970s the downward slide of the company continued
and the mills started inching towards sickness. By the year 1980
the mills were almost on the verge of closure. To avoid such a
disastrous end to the pioneers of the Woollen Industry, BIC
was taken over by the Govt. of India on 11th June, 1981 by a
special act of the Parliament "The British India Corporation Ltd.
(Acquisition of Shares) Act, 1981."

16. The private shares of the company was thus
acquired by the Government of of India, The Govt.
took corrective measures in the form of partial
doses of modernization to pull BIC out of
doldrums, but the same proved ineffective
As the company continued to incur losses, it was
referred to the Board for Industrial and Financial
Reconstruction (BIFR) on 31st March, 1991 under
the provisions of S.I.C.A. The BIFR declared the
company sick.

17. ANALYSIS

18.  After independence, the
BIC's ownership changed
hands and began to be
headed by Haridas Mundra,
who later got involved in the
famous Mundra scam in the
1960s.
 It was nationalised and
made a central public sector
enterprise in 1981. The
company was at the verge
of closure when the
government took over and it
was declared sick very
soon.
 Since then, it has been
incurring huge losses
because of obsolete
machinery, surplus staff and
shortage of working capital.

19. REASON FOR CLOSURE OF THE
MILL
OUT DATED MACHINERY
Low output because of outdated machinery
TRADE UNION TROUBLES
Company was not able to pay off the salaries of labors. Lot of
strikes happened because of non-payment of salaries. As a
result labour union was formed to resolve the issues. Though
labour union arouse the whole problem in spite of solving them.
labour union started demanding lot of facilities and incentives
for labour which the firm was not able to afford.
CORRUPTION
LACK OF HR POLICIES

20. OLD LIBILITIES
The company continued to incur losses specially
because the modalities of nationalization did not
address the issue of old liabilities which continued to
exist.
Even the loans taken by the private management
prior to nationalization continued to get compounded
resulting in massive accrual of liabilities. The rate at
which such liabilities continued to grow was definitely
much higher than the company's activities.

21. Steps Taken by the Govt
The latest revival package approved by the central
government included a grant of Rs 17 crore for introduction
of a voluntary retirement scheme for surplus workforce of
the company, and a bridge loan of Rs 11.5 crore for payment
of interest liability to the State Bank of India.
All hopes are pinned on the vast land bank BIC is sitting on
in Kanpur and Dhariwal. The government wants to sell the
surplus land to raise funds to be pumped back into the sick
unit.
However, land can't be sold straightaway because it had
been leased out by the Uttar Pradesh government to the
company.

22. Sickness is synonymous with government
owned textiles mills in the country.
Apart from British India Corporation's Lal Imli,
which manages to barely keep up five per cent
production, the eight other textile mills have all
closed. The city is dotted with not just these
empty ghost mills but the defunct power house
as well. The closure of the mills rendered tens of
thousands unemployed and contributed to the
rising crime rate.

23. Sickness is synonymous with government owned
textiles mills in the country.
Apart from British India Corporation's Lal Imli,
which manages to barely keep up five per cent
production, the eight other textile mills have all
closed. The city is dotted with not just these empty
ghost mills but the defunct power house as well.
The closure of the mills rendered tens of thousands
unemployed and contributed to the rising crime
rate.

24. OTHER SIDE OF THE COIN
“We should not have continued to strike after
independence, we did it to the British but we should
have not continued that after independence, the better
option would have been, we should have worked extra
and asked for our desired benefits, it happens in the
foreign countries but here it did not happen like this.
This policy of strike by the unions hurt the mill worst.
When government had decided that it will pay sitting
wages, workers should have protested. They thought
that we will receive payments without any work and lost
their jobs instead”