The administrators of Priyamvada Birla estate, who are fighting a legal battle with Kolkata’s Lodha family, have asked the shareholders of various MP Birla group companies to vote for their nominees on the boards of all the four group firms.
Punjab Produce Trading Co (PPTCL), a promoter entity, has proposed Satish Pradhan’s name as a director in place of Harsh Vardhan Lodha, who is also in the race in Birla Cable board.
Citing corporate governance breaches in MP Birla firms, PPTCL has also proposed the name of chartered accountant Dhanpat Ram Agarwal as their nominee on Birla Cable board. The holding firm also proposed the appointment of Agarwal and retired Judge Shyamal Kanti Chakrabarti to the board of Vindhya Telelinks and Universal Cables. In Birla Corporation, the administrators have nominated RS Thakur and Chakrabarti as directors.
With this, the annual general meetings (AGMs) of Birla Cable, Vindhya Telelinks and Universal Cables, scheduled for Thursday, are expected to be stormy. This is because the Lodhas, who control the companies, have asked the shareholders to reject PPTCL’s proposals citing “conflict of interest.” The AGM of Birla Corporation is scheduled on September 29.
In a notice to the shareholders, Birla Cable said the proposals by PPTCL are on the dictates of retired Judge Justice Mohit Shah and A C Chakrabortti, two of the three joint administrators to the estate of late Priyamvada Birla.
The third administrator, Mahendra Kumar Sharma, is totally opposed to them, the company said.
Birla Cable said Punjab Produce has ongoing litigations with the companies belonging to M.P. Birla group. So, it felt, the induction of Agarwal and Pradhan could be detrimental to the interest of the company and stakeholders due to possible conflict of interest.
Both Shah and Chakrabortti have been repeatedly writing letters to the company, saying that it has to divulge various internal/confidential information to them and have to act in accordance with their directions. “The induction of any directors result in unauthorised sharing of confidential/insider information and disruption in the company’s management. The appointment of directors, through a promoter shareholder, is an attempt to override the sanctity and authority of the Nomination & Remuneration Committee and the board of directors. The integrity of the board would be compromised if they are so appointed, Birla Cable said.
A similar argument was given by the companies against the nomination of other directors. But proxy firm Institutional Investor Advisory Services (IIAS) asked the shareholders of Vindhya Telelinks to support the election of Birla nominees. IIAS said their elevation to the board would ensure “greater scrutiny of board decisions and bring different insights to board deliberations.” MP Birla’s wife, Priyamvada Birla, had bequeathed her assets in the name of the Lodhas. The Birla camp has been in litigation with the Lodhas since then for control of MP Birla group companies.
In July this year, the Supreme Court had directed the Calcutta High Court to dispose of all outstanding appeals and cross-appeals by March 31, 2021, over Lodha holding office as a director in MP Birla group companies.
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First Published: Wed, September 22 2021. 06:03 IST