CBL wraps up in India

Shirajiv Sirimane

Ceylon Biscuits Limited (CBL) is in the brink of shutting down their operations in India due to a Supreme Court judgement.

CBL commenced commercial operations around four years ago and marketed its products under the brand name of Munchee in India after taking a property through an international court tender.

The property owned by SICOM, a consortium of financial institutions vested the property of Bakemans Industries Ltd. (BIL) for non-payment of facilities extended to them.

Financial Institution through the Delhi High Court called for a tender for the sale of the assets of BIL through an International Tender.

Ceylon Biscuits Limited (CBL) made an offer to the Delhi High Court on the International Tender. Biscuit giants in India Britannia and Indian Tobacco also participated in the International Tender.

CBL was the highest bidder, and after giving numerous opportunities to the previous owner of BIL to match the offer of CBL, finally the Court awarded the tender to CBL. Only the assets of BIL came under the tender.

During this time the former owner of BIL filed action against the financial institution for wrongful sale of their property. CBL took possession of the assets of BIL that is land, building and plant and machinery.

The Delhi High Court rejected the application made by the former owner of BIL and then he made an appeal to the Company Court.

The Company Court too rejected the appeal made by the former owner of BIL. Thereafter he made an appeal to the Supreme Court.

Supreme Court by the judgment made in mid May 2008, on a technical point, held the sale made by SICOM through the Delhi High Court null and void.

Asked to comment on this issue Chairman CBL, Mineka Wickramasinghe said CBL has made an application to the court and awaiting the final decision. “CBL is carrying out our operations till the decision is received in the capacity of a receiver,” he said.

Wickramsinghe said since they started the factory they had initially invested Rs. 300 million and a further Rs. 150 million.

He also said the Indian operations were successful and they were looking at reinvesting again, since CBL was just started make return on investments.

“This is a very sad situation and the company has now decided not to invest anymore in India and we will move out to both Bangladesh and Pakistan,” he said.