Marcom has filed a petition before the Allahabad High Court against Fedders Lloyd on account of a default in payment of Rs 1.62 crore. Fedders Lloyd, which is listed on both the Bombay Stock Exchange and the National Stock Exchange, refuses the claim regarding payment default.
Dentsu's petition was heard by the high court on February 8, and a notice has been issued to Fedders listed for hearing on February 28.
The story began when Fedders, which recently tied up with JVC of Japan for the marketing and sales of its consumer electronic products such as video cameras, audio and LCD TVs, engaged Dentsu for its advertising campaign from March to October 2007.
According to a senior spokesperson at the agency, Fedders defaulted in making payments to Dentsu towards advertising activity carried out in the print and electronic media.
The Indian Broadcasting Foundation (IBF) also issued a notification imposing a ban on releasing any Fedders Lloyd ads beginning November 2007 on its member channels. According to the IBF notification, Fedders Lloyd has consistently been defaulting in payments to Dentsu Marcom. It also owes money to IBF members. The members were requested not to accept any activity of Fedders Lloyd beginning November 1, 2007.
A senior spokesperson at Fedders Lloyd refutes all the charges. The spokesperson claims there is no default, only a dispute. Fedders Lloyd has cleared more than 80 per cent of the billing and the balance, he says, is disputed.
For the record, Fedders Lloyd's main area of expertise is customised air conditioning units. It is also engaged in the transport AC&R and the cold storage business.