The government on Friday superseded the board of Atlas Cycles and removed three management committees of the three units of the company as well as the earlier board. The NCLT principal bench said on December 16 it has appointed a new board consisting of six independent directors while taking note of their ability, past service, and stature in the respective fields of avocation. The new board has taken charge of the company with effect from December 9, 2022.
Also, the National Company Law Tribunal (NCLT) said the directors can hold a meeting on or before December 22, 2022, and conduct business as per the memorandum and articles of the association of the company and in accordance with the provisions of the Companies Act, 2013.
"The new board will take all the appropriate and necessary steps in the interest of the company with a view to revive it and save it from the present situation. It will include the constitution of new management committees, if needed, appointing accountants, auditors, finance officers, etc," the tribunal said.
Further, the tribunal said the new board of directors is free to select a chairperson from among themselves and to constitute committees as per the company law and take all necessary steps for the effective running of the company.
The six directors appointed by the tribunal are Jarnail Singh, IAS (retired), former secretary; Hem Pande, IAS (retired), former secretary, Department of Consumer Affairs; Surina Rajan, IAS (retired), former director general, Bureau of Indian Standards; Manmohan Juneja, ICLS (retired), former director general, corporate affairs; Ved Jain, CA, former president, ICAI; and R. Parthasarathy, IA & AS (retired), AOR, Supreme Court of India.
"This arrangement will be in place for a period not exceeding one year or till further orders of this Tribunal whichever is earlier, subject however to periodic review by this Tribunal as may be necessary," the tribunal added.
Atlas Cycles is a publicly listed company in which approximately 58 percent of shareholding (about 11,000 shareholders) vests with the general public. There are 600 employees, 1,000 vendors, and 3,000 dealers which are associated with Atlas Company.
The company started making losses in 2014 and its first plant in Malanpur was shut down in December 2014. The losses continued to mar the growth and its second plant in Sonepat, Haryana, was also closed in February 2018.
The Sonepat plant was the first unit established in 1951 by Jankidas Kapoor. Starting from a modest tin shed at Sonepat, Atlas Cycle Industries Ltd catapulted into a 25-acre factory complex in just 12 months. It soon became India’s largest bicycle manufacturer and was the official supplier of bicycles to the 1982 Asian Games held in the national capital.
The financial crunch it faced since 2014 went from bad to worse in the last one-and-a-half years and the coronavirus lockdown only compounded its woes.
The company on June 2, 2022, informed bourses that its Sahibabad unit is not in a position to resume manufacturing operations due to financial constraints. Hence, the workforce of the Sahibabad unit of the company will be laid off with effect from June 3, 2020, till adequate arrangement of funds is made, Atlas Cycles said.
Started in 1950 from Sonepat, Atlas Cycle emerged as India’s largest cycle manufacturer in 1965. It even ventured overseas and became one of the top bicycle-producing companies in the world with a capacity to make 40 lakh bicycles per year.
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