The dispute between Modi Fibres Ltd and Modi Rubber Ltd on whether the former can enter a Collaboration with Lenzing of Austria was adjourned by the company law board on Friday to October 13. The matter was adjourned on the request of Modi Fibres.
Modi Rubber had sued Modi Fibres for entering into collaboration with Lenzing, a business group in Austria, without informing it. Modi Rubber is a co-promoter in Modi Fibres and therefore demanded that it should have been kept informed. It claimed that it will suffer substantial loss in its interest due to non-accessibility to the board-meetings, records, assets, books of accounts. The dispute pits the two brothers, Vinay Kumar Modi, managing director of Modi Rubber Ltd against Satish Modi, chairman of Modi Fibres Ltd.
The decision of the case is going to be important as Lenzing business group has plans to set up a viscose fibre production plant in India in association with Modi Group. The first phase entailing $200 million will have a production capacity of 80,000 tonne. The Austrian company will hold a majority stake in the new venture and also provide technical competence and production experience while Modi Fibers will provide land for the proposed project.
The plant will be set up in Mumbai and is expected to commence commercial operation by 2009-10. The plant will cater to both domestic and export markets. Lenzing is keen to reach five lakh tonne capacity by 2010 from the present 4,000 tonne in the Indian market. The company is currently selling its three branded fibres, Lenzing Modal, Lenzing Viscose and Tencel.
In another significant row between Zandu and Emami case in the law board, the court has reserved the judgement after hearing the arguments from both sides. Zandu had resorted to legal recourse against Emami after the latter purchased shares from the Vaidyas, who are Zandu?s co-promoters. The Zandu-Emami case was transferred to CLB by the Bombay High Court earlier this month.