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Adventz Group chairman Saroj Poddar on Thursday said his agreement with UB Group chairman Vijay Mallya “will be modified” to the extent of the chairmanship of Mangalore Chemicals & Fertilizers if the ‘wilful defaulter’ tag remained on the liquor baron.
According to the agreement between UB and Zuari group, Mallya would continue to be chairman on the board of MCFL if they jointly secure a controlling stake in the company.
Poddar had earlier teamed up with Mallya to up the bid price for a 26% stake in MCFL, in order to thwart a move by Deepak Fertilisers and Chemicals, which has been trying to acquire a controlling stake in the company.
“The agreement will obviously be modified (if the wilful defaulter tag remains on Mallya). Earlier, when we did the agreement, we did not expect that Mallya will be disqualified by the wilful defaulter tag. But if he is disqualified by law to remain the chairman (of MCFL), then automatically that will call for an amendment,” Poddar told reporters after the annual general meeting of Texmaco Rail and Engineering, an Adventz Group company.
While United Bank of India declared the Kingfisher Airlines promoter a wilful defaulter this week, persons close to the development observed that the public sector lender’s move has raised concerns over the joint open offer of UB and Zuari group to acquire a controlling interest in MCFL. If there is no stay order on the wilful defaulter tag, according to a master circular of RBI, he would have to step down from the MCFL board.
Significantly, the agreement between the two groups allows Mallya to appoint three directors on the board of MCFL.
Poddar claimed that nothing will change as far as the joint open offer for MCFL was concerned.
“I don’t think the situation has changed at all. This could have changed the situation, had the MCFL shares being pledged for Kingfisher Airlines loans,” Poddar pointed out.
The Competition Commission of India (CCI) approved Deepak Fertilizers' proposed additional stake buy in Mangalore Chemicals last month. Poddar is expecting CCI nod for the joint open offer soon.
Either of the two open offers can start only within 12 working days from receiving CCI approval for the second deal, according to the guidelines.
On Mallya’s statement that he will pursue all legal remedies against United Bank’s move, Poddar added: “Mallya is challenging