Atlas cycle will now be ridden by new set of people as National Company Law Tribunal (NCLT) has removed all promoter directors from the Board of Directors to save the company from mismanagement. Now as an interim arrangement, six independent directors have been appointed in public interest to run the company

“We order that the present Board of Directors be removed with immediate effect. The removed Directors, henceforth, shall not represent the company as Director, and shall also not exercise any powers as Director in any manner before any authority. We order that all the management committee/s headed by members of the Kapur family be hereby removed. All Kapur brothers and legal heirs will cease and desist to hold the management in Company in any capacity with immediate effect,” the Principal Bench of NCLT said in an order, pronounced on December 6.

New appointees

The bench appointed Jarnail Singh (Retired IAS), Hem Pande (Retired IAS), Surina Rajan (Retired IAS), Manmohan Juneja (Retired ICLS), Ved Jain (Former President, ICAI) and R Parthasarathy (Advocate Supreme Court). The Board will select a Chairman among themselves and will constitute committee/s as per the Company Law. It will take all further and necessary steps as may be required for effective running of the Company. “This arrangement will be in place for a period not exceeding 1 year or till further orders of this Tribunal, whichever is earlier, subject however to periodic review by this Tribunal as may be necessary,” the bench said, while adding that new Board is effective from December 9.

Case filed in 2015

The case was filed by petitioners (one of the Kapur brothers) long back in 2015 under the provisions of Companies Act on the grounds of oppression and mismanagement. Atlas Cycles is a public listed Company in which approx. 58 per cent shareholding (about 11,000 shareholders) vests with general public. 600 employees, as many as 1,000 vendors and 3,000 dealers are associated with the company.

Share price fall

The share price of Atlas was ₹360 when the Company was flourishing. It went down to ₹29 in recent times.

Earlier the Company was manufacturing 2 lakh cycles/month. Presently, Sahibabad unit is the only unit which is functioning at a very low capacity of approximately 800 bicyles per month, due to lack of working capital and non-supply of parts by unpaid vendors. The Sonepat unit closed down in 2018, while the Malanpur unit closed and ceased to exist from 2014.

The Tribunal observed that litigation with respect to one or the other matter related to division of the company into three management units began long ago, around 2003. On one pretext or the other, the litigation is still dragging on.

Downfall

The downfall of Atlas, year after year, alongside the series of litigation and the failure of one unit after another primarily on account of mismanagement by one family group or the other, led the company into a precarious situation. Two other applications were filed by vendors/suppliers and the employee union of the Company.

The employees union represented that the fate of employees is suffering due to units being closed one after the other. The United Cycles & Parts Manufacturers Association, which is the apex association of cycle parts manufacturers in India, and is Asia’s largest bicycle parts manufacturing body, also represented that they are dependent on the Company for their existence, and that due to various litigations between family members, their entire livelihood has been lost.