The Birla Education Trust and a section of minority shareholders of Birla Corporation Ltd, the flagship company of the MP Birla Group, have approached the Company Law Board (CLB) in New Delhi on Tuesday alleging mismanagement and siphoning of funds by the company management. The shareholders, holding more than 10% shares of the company, have asked CLB to intervene and investigate the issue. They have alleged that the company management has engaged in large-scale siphoning of funds through purported brokers and through fabricated and forged freight bills. When contacted, a Birla Education Trust spokesperson refused to comment on the issue since the matter is in court. The Birla Corporation spokesperson said he was unaware of the developments.
The Birlas and Lodhas have been engaged in a legal battle since 2004 over the will of late Priyamvada Devi Birla, who bequeathed 62.9% controlling stake in the company to R S Lodha. Lodha died on October 3, 2008. His son Harsh Vardhan Lodha chaired the 2009 annual general meeting of Birla Corporation after CLB clearance.
The shareholders, according to sources, have reportedly submitted reports of ?bogus commissions on trade and non-trade sales, various discounts to parties, dubious settlement payments to the detriment of the company, fraudulent freight payments and questionable acquisition of capital goods with no visible benefit to company or its shareholders.?