TCL calls off joint venture with Baron

mumbai: after akai and aiwa, the hong kong-based tcl electronics ltd is now pulling out from the joint venture with kabir mulchandani’s baron international ltd. it is learnt that tcl has served a legal notice on baron, not only scrapping the joint venture agreement but also threatening invocation of international arbitration and levelling various charges of violation and breach of the agreement against baron.tcl baron india (tcl baron), the jv, was set up in may 2000 to manufacture and market tcl-branded brown goods and white goods in india. after baron had a spat with its earlier jv partners akai and aiwa, it tied up with tcl in may 2000. mulchandani was not available for comment. however, more than a year and a half after signing the agreement, the joint venture has failed to take off. as per the jv agreement between tcl and baron, the former shall provide the technology while baron would handle the day-to-day management control. senior tcl officials are reported to have stationed themselves in mumbai to oversee the fallout of the dispute and to assess its legal chances. tcl is reported to have pinned the blame for the failure of the venture on baron. disputes between the two partners came to a head in december 2001, when all employees of the joint venture, including the cfo, appointed by tcl, were sacked. sources close to tcl baron indicate that disputes have raged between the partners since then. recently, tcl ed (finance) tony lam too resigned from the venture citing ill-treatment by baron in the form of refusal of permission to enter the premises where tcl technology was being used to manufacture televisions, and also non-consultation on material financial decisions. tcl has demanded that baron should return its kits, chassis and moulds used for manufacturing electronic goods, which it has alleged are now in the possession of various affiliates and associates of baron. the allegations include usage of tcl technology to manufacture and market the bush brand of televisions, by viacom electronic ltd, an affiliate of baron. this is not the first baron jv that has soured. in the past, the baron venture with akai too had faced rough weather, ultimately ending the tieup. baron then tied up with aiwa, which is now being fought in another international arbitration in london.