Connaught Plaza Restaurant’s (CPRL) ousted managing director Vikram Bakshi, in his rejoinder filed before the Company Law Boad, has accused McDonald’s India (MIPL) of discrimination in the valuation of his shares in CPRL compared to that of the BL Jatia Group-owned Hardcastle Restaurants (HRPL).
CPRL is a 50:50 joint venture company between MIPL and Bakshi, which operates McDonald’s stores in northern and eastern India, whereas HRPL operates the same in western and southern India.
On August 30, MIPL had made an announcement that Bakshi had ceased to operate as the managing director of CPRL with the expiry of his term on July 17.
In his reply, Bakshi has argued that the valuation of his shares in CPRL by Grant Thornton on July 3, 2009, amounting to $331 million, was ignored by representatives of MIPL, whereas McDonald’s had allowed the conversion of the HRPL joint venture into a Development Licence and subsequently merged it with Westlife Development.
As a result of this, he argues, HRPL-managed restaurants have become a subsidiary of Westlife Development and command a valuation of $1 billion, as per a market research agency Axis Capital.
He also goes on to accuse McDonald’s of obstructing CPRL’s progress by limiting it from raising any debt and imposing a moratorium on the number of restaurants that can be opened by the company.
He further submits that pursuant to the “forceful” demands made by MIPL, he had infused capital worth R6.35 crore in CPRL between the last quarter of 2012 and the first quarter of 2013. However, he adds, that the same amount is lying as share application money and the nominee directors of McDonald’s are delaying the issue of shares.
Apart from this, he has also disputed that the “contractual valuation assessment” as provided in the joint venture agreement provides a “precise and transparent” agreement of the parties for seeking out exit valuations, adding that the said valuation method is contrary to the methods adopted by the government or statutory authorities and thus, illegal.
Refuting MIPL’s argument that he had pledged shares, Bakshi argues that there is no charge with respect to his shares of CPRL and that