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The shareholders of three of the MP Birla group companies – Birla Cable, Vindhya Telelinks and Universal Cables – have voted against the appointment of directors proposed by investment firm Punjab Produce and Trading at the annual general meeting.
Punjab Produce and Trading Co. Ltd, an investment company, had filed nominations seeking appointment of two directors on the boards of all three cable companies. In two of them, Vindhya Telelinks and Universal Cables, they tried to remove Justice (retired) Dilip Ganesh Karnik, who was seeking reappointment as a director; and in Birla Cable, they sought to oust Harsh Vardhan Lodha, who is the chairman of MP Birla group.
The AGM of all the three companies was held on Thursday and the voting results were put up on stock exchanges late on Friday evening.
The boards of these companies had deliberated over these nominations and strongly recommended shareholders to vote against them in view of potential conflict of interest if these persons were elected.
Lodha was reappointed director of Birla Cable with more than 83 per cent of valid votes cast in his favour. Dilip Ganesh Karnik, who was seeking reappointment as a director in Vindhya Telelinks and Universal Cables, received 77.54 per cent and 63.17 per cent votes, respectively, in favour from shareholders.
“It’s a landmark victory over years of mischievous acts, and one of the most memorable ones in 17 years of the proxy war being waged against the wishes of the late Priyamvada Birla,” said Debanjan Mandal, partner, Fox & Mandal.
According to the MP Birla group, two of the three members of the APL Committee – or the court- appointed panel of administrators overseeing the estate of Priyamvada Birla – have in the past couple years made repeated attempts to grab control of investment companies, trusts and societies of the MP Birla Group. In 2020, they “unlawfully” altered the boards of several investment companies, one of them being Punjab Produce. This was legally challenged almost immediately, but the dispute over the legitimacy of Punjab Produce’s board has yet to come up for hearing at the Calcutta High Court.
It is to be noted that the two members of the APL Committee – Justice (retired) Mohit S Shah and A C Chakrabortti – had demanded that Lodha step down as chairman of all MP Birla group entities, citing a contentious verdict passed by a single judge of the Calcutta High Court in September last year. However, a division bench of the same court comprising the Chief Justice clarified in an interim order that Lodha was only barred from holding office on the strength of the shares of Priyamvada Birla’s estate, allowing him to continue as chairman of the MP Birla group.
Lodha has, in the meantime, applied to the court for removal of both the administrators – Shah and Chakrabortti – from the APL Committee on grounds of bias and illegality of their actions. The petitions seeking their removal are yet to be heard, the company said.