Downturn does not deter corporate cockfights

The ups and downs of the global market and not even the highs and lows in investors' sentiment in 2008 made corporate India step back from fights it carried over from the previous year or from getting into new ones.

The Ambani vs Ambani battle once again took the cake when it came to corporate litigation, with everything else fading in the background.

More than three years since Mukesh and his younger brother Anil reached an amicable family settlement to divide the Reliance empire, the two sides are ceaselessly fighting each other to protect their so-called business interest.

The Ambanis were not the only big name involved in corporate litigation during the year that saw India Inc touching dizzy heights before stock markets collapsed like nine pins.

 

RIL, controlled by Mukesh Ambani, had initiated arbitration proceedings against Reliance Communications (RCom) owned by younger Ambani Anil on the issue of right of first refusal if RCom strikes a merger/ takeover deal with South African telecom giant MTN. RCom had slammed it, by terming the case as "legally and factually unwarranted".

Be it Bajaj or Birla on family settlement, or for that matter Tatas or Anil Ambani group on telecom issues with rivals or government, the virtual who's who has been moving the court or quasi judicial body for redressal of grievances.

New corporate battles emerged in 2008 between Emami-Zandu, Kohinoor-Temptation, Bisleri-Coca Cola or Bisleri-Mount Everest and competed for headlines with old cases such as the Ambani brothers' RIL-RNRL, RIL-RCom over MTN deal, Birla-Lodha, Bajaj Auto-TVS Motor or the Bajaj brothers' family empire division saga, which is now heading for a settlement.

It was also a year which kept the Monopolies and Restrictive Trade Practices Commission (MRTPC) busy, initiating probes against top cement manufactures ACC, L&T, Lafarge, Grasim, Jay Pee Cement along with their association Cement Manufacturers' Association over cartelisation charges.

The big three GSM telecom operators -- Bharti Airtel, Vodafone and Idea also came under the MRTPC scanner for allegedly forming a cartel and collectively rigging prices, so were leading private airlines, Jet Airways and Kingfisher Airlines after their agreement to form an alliance.

While there was no 'case of the year' as such but the Emami-Zandu battle does stand out for the way it began and ended. It all started with Kolkata-based Emami buying 24 per cent share of Vaidyas, one of the co-promoters of Zandu Pharmaceuticals. The move was resisted by the other co-promoter of Zandu, the Parikh family, who claimed the right of first refusal.

What followed were legal battles at Company Law Board (CLB) and Bombay High Court with Kolkata-based FMCG firm Emami finally buying the Parikh family's 18.18 per cent in Zandu for an estimated Rs 243 crore and gaining 70 per cent holding in the company.

Kohinoor Foods, biggest player in the basmati rice market, had to approach CLB to fend off a hostile take over bid by Mumbai-based Temptation Foods. Admitting it, the CLB had issued interim notice suspending voting rights of shares acquired by Temptation, which was later restored. The matter, however, is far from resolved and Temptation increased its stake to 13 per cent from 3.79 per cent earlier through open market purchases.

The year also saw bottled water king Ramesh Chauhan's Bisleri locking horns with corporate biggies such as Coca Cola and the Tatas. Bisleri and Coke's fight over the 'Maaza' trademark intensified as Chauhan demanded Rs 20 crore as compensation from the cola giant for allegedly breaching an agreement preventing the latter from registering the trademark in other countries.

Serving a legal notice, Chauhan contended that Maaza trademark rights was sold to the multinational for India only and not global markets. Coke hit Chauhan with allegation of selling Maaza concentrate illegally in India.

Chauhan was also involved in a court spat with the Tata Group firm, Mount Everest, over Himalaya brand for its mineral water with both sides alleging infringement of trademark. The Tata firm had filed lawsuit against Bisleri before the Delhi High Court. Later, the court restrained Bisleri from using prominently the world 'Himalayas' in its product.

As far as the old cases were concerned, 2008 brought a ray of hope for the warring Bajaj brothers Rahul and Shishir -- to bring to an end to their six-year long fight over division of the family empire.

After repeated advice from the CLB to settle the issue amicably, the two sides showed the first signs on an agreement in December, when Rahul Bajaj agreed to hand over control of Bajaj Hindusthan to Shishir. As per the agreement, Rahul Bajaj would be buying shares of Bajaj Hindusthan held by family members and group firms Bachhraj & Co and Jamnalal Sons to be transferred in favour of Shishir.

The Birla-Lodha battle over late Priyamvada Birla's Rs 5,000 crore will of 1999, however, didn't appear to be heading towards an end anytime soon.

The death of R S Lodha brought a new twist to the case with Radha Devi Mohata, sister of late M P Birla, moving the CLB seeking an immediate rectification of shareholder's register in Birla Group firms, Gwalior Webbing Co and transfer R S Lodha's shares back in the name of late Priyamvada Birla.

As counsels of both sides continued filing affidavits one after another, an irate CLB told the warring parties to speed up the matter and not let it drag on.

The long-pending dispute between the Ambani brothers over the supply of gas also didn't appear to be heading for a resolution with Justice K K Tated of the division bench of the Bombay High Court, who was hearing the tussle between Reliance Industries (RIL) and Reliance Natural Resources (RNRL), transferred to Aurangabad.

As for the battle between Bajaj Auto and TVS Motors over patent infringement of twin spark technology, the Pune-based company had the last laugh with the Madras High Court restraining the latter from manufacturing, marketing and selling 'Flame', the motorcycle in the eye of the storm.

While one or two cases were resolved, many remained unsettled. The year 2008 will pass it on to the New Year, which the corporate lawyers would gleefully accept as it would keep them rolling in times of slowdown.