After unilaterally revoking its joint venture agreement with Vikram Bakshi, McDonald’s India (MIPL) is now looking to acquire shares held by the ousted managing director of Connaught Plaza Restaurant (CPRL).
McDonald’s India in the termination notice to Vikram Bakshi has stated that it will initiate the process of determining the purchase price of the shares and will “in due course” inform Bakshi of the value of his shares as it was on the date the notice was issued by the company.
Earlier on November 28, McDonald’s had terminated its joint venture agreement with Vikram Bakshi, simultaneously moving the London Court of International Arbitration to settle the ongoing legal dispute between the two. The partnership between the US fast food chain and Bakshi, a franchisee for the northern and eastern regions, was housed in CPRL, a 50:50 joint venture, formed in 1995, that runs 150 outlets in northern and eastern India.
As per the termination notice, MIPL claims that pursuant to the termination of the JV agreement, it has “elected” to purchase all the shares owned and controlled by Bakshi in the JV company. Additionally, MIPL claims that it is entitled to purchase the shares as per clause 37 (a) of the JV agreement and that the determination of the purchase price of shares held by Bakshi will be carried out by an “accounting firm of repute”.
Bakshi, on the other hand, has contested that the termination notice is an afterthought and a “blatant attempt” by MIPL to try and circumvent the orders of an earlier September 16 order mandating maintenance of status quo in respect of shareholding and board composition of CPRL. Alleging that the termination notice has been issued in order to render the proceedings before the Company Law Board infructuous, Bakshi has accused MIPL of starting arbitral proceedings with the intention of employing “pressure tactics” and forcing him to expend large sums of money in the UK on conducting litigation.
Bakshi’s application before the CLB states that the termination notice is an “act of oppression” and is also “unfair, harsh and burdensome” not only to him but is also detrimental to CPRL.