Agnelli Demise No Buyout Trigger For Singhanias

The death of Giovanni Agnelli does not give the Singhanias the first right to refusal in buying the Italian family's equity in LML as the entire family of Agnelli, including his father, mother and sister collectively hold the 23.6 per cent equity in the Kanpur-based scooter company.

The Singhanias -- who, too, hold 23.6 per cent -- have moved court saying that with the death of Agnelli, the shareholders' agreement gives them the right to buy the Italian family's holding.

Sources close to Piaggio, however, contend that Giovanni Agnelli's shareholding has been transferred to other members of his family and still remains within the family.

 

The Singhanias would have had the right to refusal to acquire the Agnelli shares had they been sold to a third party. This is the argument which will form the basis of Piaggio's reply to the high court and their contention in the International Court of Arbitration in Paris.

The Singhanias had recently had gone to court in Kanpur seeking to buy the 23.6 per cent equity of the Agnellis in LML.

Their contention is that under the joint venture agreement, there is a clause under which either promoter has the option of buying the other out in case of the death or moving out or loosing control of the promoters.

Piaggio, however, has refused to sell its stake and has filed a petition in the International Court of Arbitration against the Singhanias on the dispute concerning the ownership of shares.

The Italian company has decided to approach the international court as the joint venture agreement clearly states that any dispute arising between the two shareholders would be decided in Paris.

The Kanpur civil court, in an interim injunction, has restrained Piaggio from transferring and encumbering the shares held by it in LML.

Piaggio is required to file its reply by August 13.

Sources close to Piaggio also point out that the Italian giant had made it clear that they had no objection to LML's search for cheaper technology from other international companies.

However, they had indicated that any decision on this matter had to be cleared by the board and the shareholders.

Top sources also pointed out that the contention that the Agnellis have lost control of Piaggio is also not based on facts.