Cabinet approves closure of Scooters India

The company that manufactured famous scooters like Lambretta and Vijai Super will be shut down after the Cabinet gave its nod to a proposal to close the loss-making state-owned firm, sources said.

The Cabinet Committee on Economic Affairs (CCEA) is believed to have given consent to shutting down of Lucknowbased Scooters India at its meeting on Wednesday, they said.

The Scooters India brand name shall be sold separately as the firm holds famous brands such as Lambretta, Vijai Super, Vikram and Lambro, shared an official. The company produces several types of three-wheelers under the Vikram brand.the government’s go-ahead to the closure proposal paves the way for the Heavy Industry Ministry to begin the process of winding up of the firm. According to the proposed plan presented to the Cabinet, ~65.12 crore required for closure of Scooters India is being sought as loan with interest from the government, sources said. The proposal also entails offering voluntary retirement scheme/ voluntary separation scheme (VRS/VSS) to the employees rendered as surplus, once sufficient funds are available.

The Lucknow-headquartered firm has around 100 employees. The employees not opting for VRS/VSS will be retrenched as per the Industrial Disputes Act, 1947, said the official who did not wish to be identified. Moreover, 147.49 acres of the firm’s land shall be returned to the Uttar Pradesh State Industrial Development Authority at mutually agreed upon rates. However, this process is expected to take time. The process of winding up of the firm also involves delisting of its shares from the stock exchange under the Companies Act. The Centre has made several efforts in the past to find buyers for Scooters India and nurse the ailing firm back to health, but they have not yielded results. In 2018, the government had invited EOI to sell its entire stake with transfer of management control in lossmaking company.