Chhabria Brothers Spat Over Woodroffe Worsens

The battle between the Chhabria brothers, Manu and Kishore, over control of the ailing Gordon Woodroffe(GWL) has reached a peak with both of them submitting separate proposals for the companys revival to the Board for Industrial and Financial Reconstr-uction.

The Kishore Chhabria group, which holds 44.84 per cent equity in GWL, has proposed a rehabilitation package which hinges on infusion of fresh capital through the promoters contribution.

The package envisages a 1:1 rights issue to mop up Rs four crore. Chhabria has offered to pick up the balance shares in the event of the proposed rights issue being under-subscribed. However, Manu Chhabria, who holds 24.89 per cent equity in the company through UK-based Gordon Woodroffe, has proposed a merger of the sick firm with his group company, SWC, for its revival.

 

The BIFR, during a recent hearing, had ordered both groups to deposit Rs 1 crore before considering their respective proposals. With both the companies having deposited the said amount with the Board, it has directed the CLRI to review the two schemes and submit reports which are still awaited.

The Kishore Chhabria group has earlier obtained an order from the Madras High Court against a judgement of the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) in favour of Gordon Woodroffes merger with Shaw Wallace.

The AAIFR had earlier allowed the merger of GWL with Shaw Wallace as part of the revival package. The stay order was granted after the Kishore Chhabria-controlled Tracstar Investment and Trident Investment claimed that they hold majority equity stake in GWL, and as such its merger with Shaw Wallace was unacceptable to it.

Manu Chhabria had earlier appealed against the BIFR move to put up a revival package without any merger involved.

Tracstar argued that their claim had been corroborated by the Company Law Board (CLB) which had declared Kishore Chhabria as the majority share holder in Shoe Specialities, which owns 12.7 percent of GWL.

The equity share of Shoe Specialities in GWL, together with Tracstars share of over 31 percent has upped Kishore Chhabrias total equity in GWL to 44.84 percent as against Shaw Wallaces share of 24.9 percent. However, the CLB judgement allowing the company to announce an annual general meeting to facilitate registration of the remaining shares with the Kishore Chhabria group company is awaited.