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Fedders Lloyd’s non-payment of dues may cause problems for JVC marketing in India

03-March-2008
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Fedders Lloyd’s non-payment of dues may cause problems for JVC marketing in India

The situation between Dentsu and one of its earlier clients, Fedders Lloyd Corporation, which led to the agency filing a winding up petition against Fedders Lloyd at the Allahabad High Court on account of default in payment of Rs 1.62 crore, might result in creating problems for JVC’s marketing in India. Not only is Fedders Lloyd sorting out the case in court, but highly placed sources close to the development informed that the company had also been banned by industry bodies such as the Indian Broadcasting Foundation (IBF), Advertising Agencies Association of India (AAAI) and the Indian Newspapers Society (INS).

As is known, Dentsu’s winding up petition was first heard on February 8, 2008, and the next hearing on the notice took place on February 28. Even as official comments were not available on this, it is understood that Fedders Lloyd has been given four weeks’ time to resolve the issue.

On being questioned on the matter of being banned by the industry bodies, Sanjeev Wadhwa, Vice-President, Sales and Marketing, Fedders Lloyd Corporation, informed, “This was a disputed matter and has been sorted out now with the IBF.” However, sources informed that Fedders had only met IBF on the issue to promise that it would clear the dues that it owed to the IBF members and that the issue had not progressed further from there until now.

A source familiar with the situation, on condition of anonymity, explained that Fedders Lloyd’s partnership with JVC wouldn’t help the organisation in circumventing the problem that former was facing in the industry, and that even as a new agency had been appointed for the JVC business in India, Fedders Lloyd still needed to take quick and active steps to clear its payments to various industry organisations, including film production houses, suppliers, processors and so on.

Fedders had engaged Dentsu for the advertising campaign for its air-conditioners, LCD TVs, microwaves, DVDs and so on during March 2007 to October 2007. Fedders Lloyd defaulted in making payments to Dentsu towards advertising activity carried out in the print and electronic media. A notice from the IBF at that time quoted, “One of the clients of Dentsu Marcom, M/s Fedders Lloyd is consistently defaulting. The client owes around Rs 3.12 crore to IBF members. The client was even called for a meeting in August 2007, and has not fulfilled the commitment. In the IBF sub-committee meeting held on October 26, 2007, it has been decided to advise all IBF members not to accept the activity of the Fedders Lloyd w.e.f. November 1, 2007. Even the existing ROs for activity beyond October 31, 2007 should not be run on your channels.”

Fedders Lloyd had tied up with JVC of Japan in December 2007 for the marketing and sale of its consumer electronic products like video cameras, audio and LCD TVs in the Indian market.

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