Birla Corporation on Thursday held its board meeting under the chairmanship of Harsh Vardhan Lodha to approve the financial results for the September quarter.
It was the first board meeting of the company that Lodha chaired after the Calcutta High Court order in October. The Division Bench of the court had declined an ad interim stay on the Single Bench order restraining Lodha from holding office in M P Birla group entities and clarified that there was a restriction “on the strength of shares referable to the estate of Priyamvada Birla”.
The order is being interpreted by the Birla and Lodha sides differently. On the basis of the order, the Birla side shot off letters to Birla Corporation, its board and Lodha ahead of the board meeting, saying that he should not be allowed to participate in the board meetings.
After Thursday’s board meeting, N G Khaitan of Khaitan & Co, solicitors for the Birla family, said, “This is a violation of court order and the directions of the APL Committee. We will file contempt proceedings.”
Birla Corporation reported a net profit of Rs 166.62 crore, an increase of 88.6 per cent over the same period last year.
Revenues at Rs 1,675.41 crore were up 1.7 per cent year-on-year as sales volume grew 2 per cent to 3.26 million tonnes.
EBITDA for the September quarter at Rs 403.85 crore and cash profit at Rs 327.86 per cent were higher by 21.7 per cent and 43.2 per cent, respectively. They were the highest ever for any quarter in the history of Birla Corporation, the company said.
Last month, however, Lodha could not participate in the board meetings of five investment firms of the M P Birla group. Khaitan said, he was not allowed to participate. The meetings were chaired by Mohit Shah, a member of the APL Committee.
Debanjan Mandal, partner, Fox & Mandal, representing Harsh Vardhan Lodha, said, “The actions of Justice Mohit Shah (retired) in respect of the five investment companies of the MP Birla Group are completely illegal exercise of the powers given to the administrators (APL Committee) by the order of appointment of the Division Bench of Calcutta.”
“Each and every step taken by Justice Shah during this period when the Calcutta High Court was closed will be challenged immediately on reopening of the court,” he added.
The Lodha camp also said that over the past one and a half months, relentless attempts were made by sending several letters and emails on behalf of the Birlas to various entities of the MP Birla group and their directors, asking them not to allow Harsh Lodha to continue as the chairman of these entities.
In these communications, a judgement (under challenge) of Justice Sahidullah Munshi of the Calcutta High Court dated September 18, 2020 was cited, they said.
Though, on appeal, the said verdict was modified by the Division Bench of the Calcutta High Court, which allowed Harsh Lodha to continue as chairman (except on the strength of the shares of Priyamvada Devi Birla’s Estate), the Birlas continued with their attempts to pressure the companies and their directors, the Lodha side added.