The legal fight for the ownership of the Birla Estate began after the late R M Lodha -- the father of H V Lodha -- produced the will of the late Priyamvada Birla. In the will, which has been disputed by the Birlas, R M Lodha was named as the sole inheritor of the Rs 5,000-crore Estate that is today valued at over Rs 25,000 crore.
Amid the decade-long legal battle between the Birlas and the Lodha Group, Harsh Vardhan Lodha has been removed as a director from the boards of four MP Birla Group investment firms, while Lodha has challenged the move terming it as “illegal”.
The legal fight for the ownership of the Birla Estate began after the late R M Lodha — the father of H V Lodha — produced the will of the late Priyamvada Birla. In the will, which has been disputed by the Birlas, R M Lodha was named as the sole inheritor of the Rs 5,000-crore Estate that is today valued at over Rs 25,000 crore.
Harsh Lodha has ceased to be a director on the boards of four MP Birla Group investment companies — East India Investment, Baroda Agents & Trading Co, Punjab Produce & Trading Co, and Punjab Produce Holdings — according to information available on the corporate affairs ministry’s MCA21 portal as of November 18.
He ceased to be a director on these companies’ boards from September 18, 2020, according to the information on the portal. It was also on September 18 when the Calcutta High Court passed an order restraining him from holding any position in these companies based on the strength of the shareholdings of the Birla Estate in these companies.
Under the companies law, registered companies are required to submit various filings to the ministry through the portal.
The filing is based on the APL (administrator pendente lite) committee led by retired judge M S Shah’s decision to remove him from the directorship after the September 18 ruling of the Calcutta High Court. The three-member APL panel was appointed by the court to administer the affairs of the Birla Estate.
Meanwhile, the Lodha group has filed a petition in the Calcutta High Court challenging the removal of Harsh Lodha from the directorship. The petition is scheduled for hearing from Friday.
A Lodha group spokesman told PTI that they have moved challenged the removal of Lodha in the Calcutta High Court as the decision is based on “a raft of illegal actions taken by M S Shah”, who as the chairman of the five investment companies of the M P Birla Group, removed Lodha from the directorship in four firms by “misinterpreting the High Court verdict”.
The APL committee is managing a total of five M P Birla Group investment companies — East India Investment, Baroda Agents & Trading Co, Punjab Produce & Trading Co, Punjab Produce Holdings and Gwalior Webbing. Harsh Lodha ceased to a director on Gwalior Webbing board from December 21, 2019 after the APL panel voted him out by a majority at the AGM that year.
The APL panel also manages the five operating listed companies of the Estate. A Birla family spokesperson said the APL panel’s decision is based on the single-bench order of the Calcutta High Court passed on September 18 and that the same was approved by the court’s division bench on October 1.
“Lodha has continuously misinterpreted court orders and flouted the APL panel’s decisions to cling on to the boards of these firms wrongfully. We will move the court to restrain him doing so in contravention to the decisions of the HC and the APL panel,” the Birla family spokesperson told PTI.
The Birla Estate owns substantial stakes in the five investment companies. Besides, MP Birla Group has five operating companies — Birla Corporation, Birla Cables, Vindya Telelinks, Hindustan Gum and Universal Cables — where the five investment firms have crossholdings.
Separately, the warring groups are also challenging each other over Harsh Lodha chairing the board meetings of the four operating companies — Birla Corporation, Birla Cables, Vindya Telelinks, Hindustan Gum and Universal Cables — earlier this month.
“The interim order of the division bench made it clear that Lodha was barred from holding any office in the MP Birla Group only on the strength of the shares of the Estate,” Debanjan Mandal, partner at Fox & Mandal, the law firm representing Lodha group, told PTI from Kolkata.
Mandal also said Shah conducted the board meetings of the four investment companies without compliance with various provisions of law and that “Shah coerced these companies to send notices to the corporate affairs ministry informing Lodha’s removal as a director.” He also claimed that Shah’s actions are “illegitimate exploitations” of the high court verdict.