Following permission from a divisional bench of the Calcutta High Court to make public decisions taken in the annual general meetings (AGM), Harsh V Lodha has been reinstated as a director in two of MP Birla Group companies and will also be entitled to get a part of the profits from the group companies.

The Court’s order, which set aside the August 9 ruling of the same court passed by a single bench, prevented these companies from publishing the voting results of the last AGMs. However, the group companies now will be able to execute the decisions taken at the AGM last year.

While group companies Vindhya Telelinks and Birla Cable can now reappoint Lodha as a director in these companies following approval of the shareholders, dividends to shareholders of Birla Corporation and Vindhya Telelinks can now also be paid.

Lodha is now entitled to a 0.75 per cent share in the net profit of Birla Corporation and Birla Cable while the profit related commission for Lodha is now permitted to exceed 50 per cent of the total annual remuneration payable to all non-executive directors of Vindhya Telelinks. Lodha is the chairman of the flagship Birla Corporation and a director in the other two companies.

The profit related compensation is in addition to the sitting fees and other reimbursement of expenses payable to Lodha for participation in the board, committee and other meetings. Over this decision, Birla Corporation reasoned that Lodha has contributed substantially towards the sustained growth of the company and has played an active role since his appointment as non-executive chairman back in October 2009.

Shareholders of these respective companies had passed these special resolutions which now has been made public to the shareholders.

Additionally, non-executive directors, including independent directors of Birla Corporation and Vindhya Telelinks have also now been permitted for a profit related commission within the overall maximum limit of one per cent per annum.

Birla Corporation will now be paying Rs 69.63 crore as dividends at a rate of Rs 7.50 per share while Vindhya Telelinks will pay Rs 14.22 crore as dividend at a rate of Rs 12 per share.

A source in Birla corporation said that the court order will be retrospective in nature and the compensation to Lodha can be counted for the full 2019-20 fiscal year.

The court order has lent yet another twist to the more than a decade and half old dispute over control of the M P Birla group. It started in 1999 over the purported will of Priyamvada Birla, bequeathing her entire estate to Rajendra Singh Lodha and is in the last leg with probate proceedings underway. In 2012, a three-member Administrators Pendente Lite of the Estate of Priyamvada Birla (APL Committee) was appointed by the Calcutta High Court in 2012 to administer the estate of Priyamvada Birla.

On the basis of the APL Committee's view, Arvind Kumar Newar, nephew of M P Birla, and others, had opposed making public the voting results in the AGM of these companies.