Bad news for burger lovers in the national capital. Popular fast food joint McDonald’s has decided to shut down almost 80 percent of its shops in Delhi. The burger joint will be shutting down 43 out of 55 McDonald’s outlets in Delhi from today. When asked, McDonald’s said, “the eating house licenses of a number of McDonald’s restaurants in Delhi have expired”. The closure is a result of a long drawn legal battle between Vikram Bakshi and McDonald’s, and the case reached a logical conclusion with the Connaught Plaza Restaurants Ltd. (CPRL) Board deciding to shut down 43 out of 55 McDonald’s outlets in Delhi from Thursday, an IE report said. The issue regarding the maintenance of quality and hygiene at the stores had been going on since 2013.
McDonald’s India and Vikram Bakshi are 50:50 partners in Connaught Plaza Restaurants. This organisation runs the fast food chain in the north and eastern parts of India. Bakshi was declined by McDonald’s India to be renominated in the post for the firm’s Managing Director, when his term expired on July 17, 2013. Ever since then, the two sides have been fighting it out. Bakshi had challenged his removal from the firm, in the Company Law Board (CLB), Delhi. He even accused the burger chain of mismanagement and oppression under Sections 397 to 402 of the Companies Act, 1956. Bakshi had accused Hardcastle Restaurants as well, which is a company that runs the operations in the west and southern part of the country, of influencing the US fast food chain “to take oppressive steps” against him.
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In 2016, in a big setback for Vikram Bakshi, the Delhi High Court had given a go-ahead to his estranged joint venture partner McDonald’s to pursue arbitration it had initiated against the former before the London Court of International Arbitration. In doing so, the High Court had revoked the stay that Bakshi got from a single-judge bench of the court way back in December 2014. Dissatisfied with the high court order, Bakshi appealed to the Supreme Court too. However, the apex court dismissed the appeal. But now, the decision has been taken by the firm, to shut down many of the outlets in the national capital. McDonald’s India Pvt Ltd (MIPL) spokesperson Barry Sum said, “The Board of CPRL is working to obtain the required licenses. Pending this, CPRL is temporarily suspending the operations of the affected restaurants.” Barry Sum talking about the possible job losses due to closure, said, “employees becoming jobless is erroneous.” He added, “We understand that CPRL is retaining the employees of affected restaurants and will pay them their salary during the period of suspension.”
What is the case about?
McDonald’s India and Vikram Bakshi are 50:50 partners in Connaught Plaza Restaurants. This runs the fast food chain in the north and eastern parts of the country. The two fell out when CPRL did not reappoint him as MD in August 2013. Bakshi had subsequently moved CLB challenging his ouster, McDonald’s moved for international arbitration in September 2013. Bakshi got a stay from arbitration proceedings from the Delhi High Court. Even an appeal to the Supreme Court was dismissed, but now the board of directors have decided to shut down 43 out of 55 outlets in Delhi.