Birla Blues: The story so far
(Updated 1 October 2004, 11:55 PM, Scroll down for the
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What was gripping about the Birla inheritance saga was not just the family staking claim against the outsider, but also the amazing speed with which the commandoes hit the ground running. The swift turns of events have caught many off-guard.
Dancewithshadows.com gives you a ring-side view, guiding you through the nail-biting Test of Wills.
1. THE DEATH: Priyamvada Birla, chairperson of MP Birla group passes away at 76, leaving behind a Rs 5000 crore estate. Mrs Birla does not have any children, nor any "RELATIVE" as defined under schedule 1A, section 6, Companies Act 1956. MP Birla Group owns the listed companies
Telelinks, Universal Cables & Birla Ericsson apart from a bevy of unlisted companies. The
total market capitalisation of all listed MP group companies is over Rs 900
2. THE WILL: On the 10th day of her demise, Mr Rajendra S Lodha produces a 4-line will purportedly written by the late Mrs Birla before the Birla patriarchs. There are seven Birla groups, the biggest and most visible among them being the Aditya Birla group, chaired by Kumar Mangalam
Birla, with a stock market capitalisation over Rs 20,000
crore. Mr Lodha has been a past president of the Federation of Indan
Chambers of Commerce and Industry
(FIICI) and is chartered account to several Birla companies. He is also co-chairman of Birla Corporation, which is the flagship company of the MP Birla group. He has been on the director boards of a host of
blue-chip companies and govt. institutions like SBI,
LIC, Sebi etc. Mr Lodha has been associated with the MP group for long and was close to the late Mrs
Birla. Mr Lodha does not provide copy of the will to the Birla patriarchs.
3. EMPIRE ENRAGED: Birla Dynasty erupts in indignation. BK Birla goes on record that he would not let an outsider cart away Birla assets. He asserts that the Birlas will collectively fight this, but stops short of saying that the will is forged. There is no mention of "MP Birla's wishes to give his assets to charity" on this day.
4. MOVING IN: Birlas ask Lodha, through their solicitors Khaitan & Co to send them a copy of the will.
It is not clear whether the copy has been sent or not, but there are no reports to that effect.
5. LODHA TALK: The Kolkata-based Telegraph newspaper publishes a report quoting Mr Lodha's son, which says to the effect that
"Mrs Birla trusted us so much. It was clear to everybody. There are no Birlas in any MP Birla group company boards".
6. MARKET MOVE: In a seemingly-unrelated development, the foreign institution Emerging Markets Fund acquires 5.65% stake in Birla Corporation, the MP Birla group flagship, in a stock market operation. Birla Corp stock shoots up on the bourses.
7. THE KEY: Arclights shift to Birla Corp and Pilani Investments. Pilani Investments is a holding company, having stakes in several Birla companies across groups. Pilani was set up by late GD
Birla, the Birla doyen, to consolidate the group's holdings. It is almost similar to Tata Sons, which is a holding company having stakes in Tata group companies. Pilani Investments, thus, is key to control of, or rather entry to, most high-profile Birla Companies, even outside the MP group. Simply put, a major holding in Pilani entitles you to the board rooms of several Birla companies.
8. CRITICAL STAKE: In turn, a substantial stake of Pilani Investments (25%) is owned by Birla Corporation. This means that Mr Lodha (if the will is executed), will own Birla Corporation, by virtue of which he will gain a foothold in
Pilani, and thus be eligible for a board seat in several Birla companies outside the MP birla group as a representative of
9. CLOSING RANKS: Camp Birla collectively issues a statement in Bombay to the effect that the Birlas are not after money; that they do not want a single rupee of it; that the late Mr& Mrs MP Birla wanted their assets to go to charity after their time; that the
Birlas' intention is to secure the estate for charity.
10. WILL IT, WON'T IT? Questions are raised about the validity of the Priyamvada Birla will. It is rumoured that there was another will prepared much earlier by MP Birla which wanted his estates to go to charity, after the lifetime of Priyamvada
Birla. But even after a couple of days since the initial whispers started, such a will has not been produced by the
Birlas, who are contesting Lodha's claim.
11. SPECULATION: Possibility of existence of such a will fuels speculation as to what would happen if such a will is produced by
Birlas. Legal eagles are divided. According to one school of thought, if MP Birla willed charitable societies to be the ultimate beneficiaries of his will, then Priyamvada's rights to make a will come under a cloud, since she
won't be an "absolute owner" of MP's assets as opposed to a "limited owner". According to another school, Mrs Birla becomes the rightful owner of all her husband's assets under the Hindu Succession Act. There is a third group which thinks thus: Even if there is such an MP Birla will, it has to clearly spell out the intended transfer of assets to charity. A vague mention of desire that the assets should go to charity will not hold water.
12. SHRAADH: The Birlas' aggression is met with silence from
Lodha. On the Shraadh ceremony in remembrance of Mr
Birla, Mr Lodha turns up at Birla Park in Kolkata and attends the ceremonies. Several newspapers, including
The Times of India, put out agency reports saying he
did not attend the function, whereas Economic
Times, TOI's sister publication, Telegraph and other leading papers correctly mention his presence at the function.
13. MEDIATOR? For a brief while, the name of RP
Goenka, patriarch of the Rs 6000-crore RPG Group does the rounds as a mediator to sort out the issue. Mr Goenka himself is not on record, though his son Sanjiv Goenka categorically tells
The Economic Times that as far as he knows, he father has not been approached for any mediation.
14. LEGAL BUGLE: Birlas, through their lawyers, file a caveat in Calcutta court. The caveat means that Mr Lodha cannot make any move on probating his will (Legalese for getting the will legally ratified) without informing the
Birlas. The battle lines are drawn.
15. DYNASY DETERMINED: In a separate move, Yashovardhan Birla files a caveat in a Calcutta court. Mr Yash Birla is the youngest in the Birla clan, and was brought up by Mr MP Birla after his father Ashok Birla died in a plane crash. Mr Yash Birla is seen as one of the potential beneficiaries if the MP assets are retained in the family.
16. NO COMPROMISE: The same day, Mr SK Birla asserts that there is no plan to work out a compromise formula with Mr Lodha on the Inheritance. He also says that there is no plan to buy the Pilani stake from
17. ENTER THE LAWYERS: Birlas ask their solicitor firm Khaitan and Company to scout for the best legal brains to fight the impending battle. Names of top-notch Supreme Court lawyers like Arun
Jaitely, Harish Salve, Shanti Bhushan etc are do the rounds.
Meanwhile, Mr Lodha has already hired law firm Fox Mandal to represent his case. He is expected to move court to probate the will on Monday, July 19. 2004. It is reported that his lawyers have already paid the court fee of Rs 50,000 to start the proceedings, though one wonders how the proceedings can be initiated in the presence of multiple Birla caveats.
18. LODHA OUT OF AUDITING ERICSSON: The Hindu Business Line in its Edition on Saturday, July 18 reports that in May, Lodha & Co had opted out as statutory auditors of Birla Ericsson, one of the MP Birla group companies. Birla Ericsson is slated to hold its Annual General Meeting (AGM) on Tuesday, July 20 in Rewa, Madhya Pradesh. Lodha's audit firm i statutory auditors for a slew of Birla companies for a long time. Its is to be noted that the letter in this regard was written by Lodha's firm on May 6, much before Priyamvada Birla's death. Completely in the dark about this, the Telegraph reports the same day that Tuesday's Birla Ericsson AGM may throw up surprises on the auditor front!
19. MANAGING MEDIA: Birlas dig in their heels for the long haul. To manage the media and PR during L'affaire Lodha, on Saturday, they hire PR firm Genesis PR (http://www.genesispr.com/) for the battle ahead.
20. CLOSE WATCH: Financial institutions having major stakeholdings in Birla group companies are keeping a close watch on the developments. In a report in The Financial Express, they refuse to make any forward-looking comments.
EDIT ERROR: A report from some frustrated reporter in
Economic Times mentions that the media has still not been able to produce "a single quote from the
Lodhas." Dancewithshadows advises the editors at Times to read Telegraph more often.
21. YASH MEETING LAWYERS? It is expected that Mr Yashovardhan Birla will be meeting his lawyers on Monday to chalk out the next move.
22. WAITING FOR TUESDAY: Anticipation rises as Tuesday draws near. For the first time, two MP Birla group
companies go to the meeting hall without clear chiefs. Birla Corp and Birla Ericsson are to hold their board meeting and
AGM respectively on Tuesday. At Birla Corp, Ms Priyamvada Birla was
chairperson and Mr Lodha was vice-chairman. Its is to be seen if the Birlas will let the outsider take the high seat at the board meeting, to be held at Birla Building in Calcutta, the Birla group headquarters. Mr KC Mittal, MD, is to chair the Birla Corp meeting. In the first day after the Priyamvada will, Mr Mittal had spoken to the media where he had said that an
ownership change was welcome.
23. FIRST MOVE: Lodhas, who have kept their cards close to chest so far, move the Calcutta High Court
seeking probate of will. Birlas vow to contest the validity of the will when the court calls for
them owing to the caveats filed by them in this regard.
24. BOARD ROOM BRAWL AHEAD: Board meeting of Birla Corporation looms. A news agency report speculates
that the board meet venue may be shifted, but there is not confirmation till late night to that
effect. The meeting is supposed to take place at the 15th floor of Birla Building in Calcutta. A
report in the Financial Express says that financial institutions may block Mr Lodha's attempt to
become chairman. ICICI Bank is the only financial institution with a nominee on Birla Corpn board,
though other FIs like LIC, GIC, UTI etc have stakes in the company. In the meantime, in Mumbai,
Yash Birla meets his lawyers to chalk out the future course of action.
25. TWO MEETINGS: Attention rivetted on the two meetings of today (July 20). the first is the Birla
Corpn board meet in Calcutta and the second is the Birla Ericsson board meet in
Rewa, Madhya Pradesh.
26. MEET WITHOUT FUZZ: Confirming a PTI news report the previous day, Birla Corporation holds its board meet at a five-star hotel in Kolkata, away from the Birla Building. Lodha chairs the meeting, held mainly to declare the company results. All 9 directors attend the meeting. It is rumoured that financial institutions have pitched in for a greater role in the running of the company. There's no proposal to make Lodha the chairman. The will was produced, much after the agenda for the board meet was circulated. Times Of India reports that AV Birla grop company Grasim is plotting to remove Lodha & Co as its auditors.
27. BACK TRACK? Meanwhile, a Business Standard front page report claims that one of the witnesses, PL Agarwal, has backtracked as a witness. Agarwal is a leading lawyer with Khaitan & Co.
28. WILL POWER: The registration of the document disproves any doubts on the validity of the will. Besides it will be diffcult to raise an argument that she was not sound of mind in 1999. From now, Birlas' main argument will have to hinge on the point that MP Birla's assets were not fully owned by Mrs Priyamvada
29. EDITORS' AGONY: All through the controversy, the KK Birla group-owned Hindustan Times stays a long way from the dispute, putting out very brief news items on the controversy, mostly buried in the bottom deck of the paper. HT can take credit for the fact that the paper does not become a tool for succession battles despite the high stakes. Nandini Nopany, daughter of KK Birla, is on the board of Birla Corporation.
30. CENTURION: The same day, BK Birla group company Century textiles holds its AGM in Mumbai. SK Birla, director chairs the meet, which passes of
31. FAR AWAY.... Meanwhile, Birla Ericsson AGM is held at Rewa in MP
32. THE WILL IS OUT: Wednesday, July 21 dawns with Telegraph, Business Line and Business Standard front pages splashing the most-sought will on their front pages. In the will, Mrs Priyamvada Birla says that she chose Rajendra Singh Lodha as the heir to her property because she considered him fit to "maintain the ideals of Mr M.P. Birla," her husband. "It is apprehended (that) if the property of M.P. Birla travels to (someone) other than Mr R.S. Lodha, the good name of M.P. Birla might be sent to oblivion." The will also claims that Mrs Birla is the absolute owner of the entire assets. See the complete report in
33. TRUCE? An Economic Times report, which seems to have been written just for the sake of it, says that Birlas are open to a truce with Lodha. But if the crux of the Birla demands is true, there is little scope for negotations, since Birlas are merely willing to accommodate Lodha in a trust to be set up holding MP Birla assets and run by the Birlas!
34. DROPOUTS: Meanwhile, there are reports that out of the 3 witnesses, 2 have dropped out. Still, the will carries the name of all three. Witnesses turning hostile one after the other may weaken Lodha's case.
35. COURT ACTION: Notices have been reportedly issued by the court to the Birlas informing them about the Lodha move seeking probate. Birlas deny they have received any such notice so far. Lodha has not yet provided the Birlas with a copy of the will.
37. CONFUSION: A surprise a day - Thursday saw Economic Times and Telegraph coming up with page one reports throwing light
on a new Will! Or is it an old Will with more contents? ET, which missed the Will story yesterday has tried to make up
for the lapse with the new Will story. It says that according to a
Will prepared by Priyamvada Birla in April of 1999 (predating the already-out will) which reads different and mentions Nandiny Nopany who, the
Will says, will be involved in the trusts. Yet, the will is clear that Mr Lodha will be controlling and owning all assets of which she is the owner. The Telegraph report too mentions this, but reads more like an addition to the will splashed by them the previous day. The media it seems, is groping in the dark.
38. AUDIT TRAIL: The Birlas may try all their might to push Lodha out of auditing their firms, but it may not be that easy. Telegraph reports that removing an auditor mid-way could be one of the toughest things a company can go through, which may require approvals from powers as mighty as the central government. Removing Lodha from a multitude of Birla companies may be easier said than done.
39. CHUCK-LODHA: Despite the obvious
troubles that may entail, at a Mangalam Timber (a
Birla group company) board meeting, a resolution
is moved to remove Lodha & Co from its auditorship.
40. SURPRISE LETTER: A new
letter, purportedly written by the late Ms Birla
surfaced in the media on Thursday, in which she
mentions that her will is expected to throw up a
controversy after it is opened. A report said that Mr
Lodha has appended this letter along with the
documents filed to probate the will. Apparently,
this has delighted the Birlas, who have found some
loophole on filing this letter along with the probate
40. LATE BREAK: A day after The
Financial Express broke the story that Gurumurthy has
been roped in by the Birlas, The Times reporters
wake up to this and put up this story on their front
page. It is obvious that a lot of journalists
these days don't read other newspapers. Gurumurthy has
been a Birla associate before too, in Kumar Mangalam
41. COUNTERMOVE: On Friday, the Birlas' move
against the probate is challenged by Lodha.
42. NEW TURN: The case takes an interesting
denouement on Monday, when the Calcutta high court
judge declines to hear the case, since he has been
associated with the Birla family for a long time and
it wouldn't be proper for him to hear the case.
43. JETH LAG: The same day, The Economic
Times reports that the Birlas have tapped Ram
Jethmalani for help in the impending battle.
44. WRONG NAMES: Both India Today and
Outlook come out with cover stories on the
controversy, which are hardly illuminating. One of
them even repeatedly mentions Lodha's legal counsel as
Fox And Mandal. The firm's name, for the
ignorant mediapersons' benefit is here: FOXMANDAL.
Kindly visit www.foxmandal.com.
45. MORE CAVEATS: The judge has bowed out and it is still a far way to the start of the actual hearing process. First, the court has to decide on the petition challenging the caveats filed by four members of the Birla clan (SK Birla, BK Birla, GP Birla and Yash Birla). Another two caveats have been filed by two of late MP Birla's sisters who have just now entered the case. The Lodha petition seeking dismissal of caveats does not mention them, since probably they entered the case after his petiton was filed in court. Only after the court decides on the caveats can it proceed to hear the probate plea. The Acting Chef Justice of Kolkata High Court has yet to fnd a replacement judge to hear the petition. Long road ahead.
46. BIRLA CHARGE: Lawyers at NG Khaitan & co, counsel to the Birlas, blame the opposite side for not giving them a copy of the will. Lodha lawyers refute this claim, and that the opposite side was given the opportunity to view a copy of the will.
47. NON-NEWS: Newspapers, as usual, digress into non-stories in times of news drought, fuelled by demand to feed the reader's appetite. So, we have Times of india front page talking about the "brewing" succession issues in the BK Birla family.
48. NEW TWIST: Meanwhile, sister publication Economic Times reports on a "Second Birla family" which may stake claim for the Birla assets. MP Birla's brother Gajanan Birla had a second family, with several progeny, who are not intimately connected with the Birla mainstream. This family is also technically correct in staking claim for the MP Birla estate, reports ET.
49. NEW JUDGE: On Tuesday, the Calcutta High Court acting chief justice appointed Kalyanjyoti Sengupta as the new judge to hear the Lodha petition seeking dismissal of the Birla caveats. Sengupta on Wednesday asked the Birlas to prove their
locus standi in the case, asking them to submit affidavits in this regard within 2 weeks. After that, the Lodha lawyers get 2 weeks to submit their affidavits against the Birla submission. In effect, wait for 4 weeks for anything legal to unfold. The next hearing is on August 25.
50. SECOND FAMILY: The previous day's ET report of a second family was confirmed by the July 28 Business Line report adding that this family has approached the lawyers to find their position in the whole maze.
51. OUST-LODHA PICKS MOMENTUM: A Times of India report mentions that after the move at a Mangalam Timber board meet to remove Lodha & Co from statutory auditorship of the company, Mysore Cements another Birla company, has moved to remove Lodha from its auditorship. Mangalam is a BK Birla company, while Mysore Cements belongs to SK
52. STRATEGY? Meanwhile, Fox Mandal said that they are not challenging the anti-probate caveat filed by MP Birlas "as a matter of
legal strategy". The Lodha plea only objects to the Birla big shots' caveats. It is important to note that in the court, Lodhas lawyers challenged the Birla caveats on the grounds that they are not
legal heirs of MP/Priyamvada Birla. Fox Mandal may be lining up a strategy to defeat the Birla wills first on "legal heir ground" before moving in to tackle the sisters’ caveats on different grounds.
53. LIMITED CASE: Justice Sengupta also made it clear that he is hearing the limited subject of accepting or rejecting the caveat pleas. The matter of probate proceedings is not under his jurisdiction, for which a different judge may be appointed at a different stage.
54. HINDALCO OUSTS LODHA: On Saturday, July 31, AV Birla group company Hindalco removed Lodha & Co as
branch auditors of the company and appointed its statutory auditors Singhi & Co in their place. The
AGM took up up the proposal to reappoint Lodha as auditors, but the proposal was defeated by a
voice vote by shareholders. Kumar Managalam Birla said it was a delicate matter involving the Birla
family and handed the chair to director BD Desai who tabled the proposal. Lodha has a long way of
appeals ahead to secure his rights, but imagine him pursuing dozens of suits seeking reappointment!
55. JETH AIR: The Times of India reported on August 4 that the Birlas have consulted Ram Jethmalani on the way ahead. Jethmalani
has confirmed this.
56. JUNIOR LODHA TARGETED: An exclusive report in Economic Times says that Indian Rayon, an Aditya Birla group company is planning to convene an Extra-ordinary General Meeting of shareholders to remove Harsh Lodha, son of RS Lodha from the company's director board. Indian Rayon is the maker of popular readywear brands like Allen Solly. Kumar Birla is the company's chairman.
57. LODHA HITS BACK: The Economic Times on
Thursday reported that RS Lodha has sacked two Birla
nominees from the board of South Point junior school
in Kolkata. The school is run by the MP Birla
charitable trust and chaired by RS Lodha. It is only a
matter of time before the two are ousted from South
Point high school board also, the report adds. The two
trustees facing Lodha ire are DK Mantri and NG Khaitan.
58. LETTER BOMBS: The Times of India says
that RS Lodha has, in his custody several letters
written by the late Priyamvada Birla, which he may use
to buttress his claim for the MP Birla assets. The
letters reportedly express Priyamvada Birla's lack of
faith in the Birla family.
59. MUTUAL WILL: The TOI also says that MP
Birla and his wife had prepared "mutual
wills" in 1981, which state that ultimately, all
the family assets will go to charity. This, the paper
says, will be used by th Birlas in their fight against
60. ZOOMING IN: The TOI also says that Birla
Cos may choose E&Y to replace Lodha & Co,
which is being progressively evicted from auditorship
of Birla group companies. The report quotes E&Y
officials as having held discussions with Birla group
companies to step in in place of Lodha. E&Y is
already auditing several KK Birla group companies.
61. LODHA IN INDO GULF CROSSHAIRS: The latest attempt to push Lodha out of its corridors comes from Indo Gulf, an AV Birla group company. ET reports that the company, which was supposed to hold its AGM on August 10, has postponed it. At the AGM, the company was to take up a proposal reappointing Lodha & Co as its auditors.
62. ADMINISTRATOR? Meanwhile, PTI says, quoting unnamed Birla sources, that Birlas will, within 3 days, file a petition in the Calcutta High Court asking for the appointment of an administrator for
managing the MP Birla group assets. The source said that the whole purpose of Birlas is to "save the assets of the group from Lodha for humanity".
63.MUTUAL PROBLEMS: The Biras are believed to be
conceNtrating on the mutual wills supposedly prepared by MP Birla and his wife in the early
80s, says an August 12 report in Times of India. According to the said will,
the couple jointly pledged to bequeath their assets to charity. The legal validity of such a joint will is still not clear. Will such a joint will take
precedence over a will prepared by Priyamvada Birla after her husband's death? The report cites instances where such joint mutual wills have been held up or turned down in cases abroad.
64. OUT AND OUT: One by one, it seems, Lodha & Co is exiting auditorship of various Birla companies. On Thursday, August 12, Lodha exited auditorship of Indo-Gulf, an AV Birla group company. Indo Gulf had recently postponed its AGM to enable Lodha to hand in his resignation.
65. CARETAKER MOVE: It was rumoured on Thursday, Aug 13 that the Birlas have moved the court with a petition to appoint a caretaker to manage MP Birla assets. but by the end of the day, Birla sources told newspapers that the petition was ready; bu the suit was not filed yet. It's only a matter of time.
66. EXIT MODE: Lodha & Co on August 7 expressed its unwillingness to continue as auditors for Indo Gulf Fertilisers. This was conveyed by the company to the Bombay Stock Exchange on August 13. In place of Lodha & Co, SR Batliboi and Co will be the new statutory auditors for the company. Indo Gulf AGM will be held on September 14.
67. THE CODICIL: On Tuesday, August 17, The Economic Times reported that that Lodha lawyers have attached a copy of a "codicil" along with the will documents before the court to probate the will. A codicil is legalese for an annexure to the will and supports the will. The codicil, says ET, values Priyamvada's assets at just over Rs 3.5 crore. The report says that Priyamvada has named RS Lodha for the use of her house and belongings and all valuables for exclusive use -- and specifically prohibits use of any of them by any member of the Birla family or even her own close relatives. The codicil lists out the movable and immovable assets owned by Priyamvada Birla
68. MUTUAL DISLIKES: Calcutta-based Telegraph reported in its business section on August 17 that the Birlas are all set to file a probate for Mutual Wills prepared by MP and Priyamvada Birla in early eighties. As if on cue, the same evening, Birlas filed probate for the mutual will prepared in 1982. The Telegraph report also said that Priyamvada's brother Kashinath Tapadia has also joined the Birlas in the batte of wills.
69. NEW BATTLEFRONT: At a press conference on August 17, NG Khaitan, lawyer to Birlas confirmed in Kolkata that the Birlas have indeed filed for probating the joint wills. Mr Khaitan pointed to an apparent discrepancy in the Lodha probate plea which values Priyamvada Birla assets at Rs 3.5 crore, whereas the entire assets are estimated at over 5000 crore. Lodha, he said, is not the "rightful or lawful inheritor" to the assets. It has to be recalled that unlike the 1999 Priyamvada will, which was a registered document, the previous mutual wills are not registered. However it is not necessary that a will is registered for probation.
70. BROTHER BLUES: Kashinath Tapadia, Priyamvada Birla's brother has been quoted in Business Standard as saying that his sister must have been misled to sign the 1999 will. He refused to believe that she could unilaterally revoke the joint commitment made by the couple in 1982.
71. LOCUS STANDI: Mr Lodha is expected to
file an affidavit in the Calcutta High Court on
Monday, questioning the locus standi of four important
Birla family members to raise objections to his claim
to the MP Birla group assets worth over Rs 5,000 crore.
This should happen on Monday 23 August 2004 or Tuesday.
72. UNSOUND MIND? : According to the
Economic Times (21 August), the Birlas may get close
relatives and confidantes of Priyamvada Birla to file
affidavits attesting to her 'erratic behaviour".
73. PRIYAMVADA BIRLA'S POST STAYS VACANT: Priyamvada's post as director to stay unfilled
for the time being. PTI reports that Birla Corporation, the MP Birla group company, has temporarily decided not to fill the vacancy caused by the death of Priyamvada Birla, who was chairman of the company.
Birla Corporation will move an ordinary resolution seeking permission of the shareholders so that the ‘vacancy caused by the demise of Priyamvada be not filled up at present’, according to the company’s notice for the annual general meeting.
74. YASH OUSTS LODHA: The Yash Birla group ousted Lodha & Co as auditor. Birla Power Solutions, a Yash Birla group company, is set to remove Lodha & Co as its auditor.
Birla Power Solutions, which will hold its annual general meeting in November, is expected to replace Lodha & Company shortly.
75. FAMILY OUTINGS: The Economic Times
reports that the Birla family has claimed that
Priyamvada Birla used to go on trips with the family
regularly. This claim is part of the Birlas' strategy
against Mr. Lodha to disprove that claim that she was
not close to the family. There were regular meals
together, as well as the late Priyamvada Birla
was also involved in weddings and some other religious
ceremonies according to the Birla family.
76. MAHATMA GANDI FOR LODHA!: Rajendra Singh Lodha
has produced a letter written by Gajanan Birla at the hearing of the discharge petition.
The main witness to the letter was the father of the nation, Mahatma Gandhi.
The letter is Gajanan Birla relinquishing his stake in the estate. Gajanan is grandfather of Yashvardhan
Birla, one of the caveators. The letter dated August 2, 1934 was signed by Gajanan Birla in the presence of Mahatma Gandhi and G D Birla in
Benares. The letter states that by a registered deed dated March 16, 1933, with the consent and concurrence of Gopa Koer Birla (wife of Gajanan
Birla), Gajanan Birla transferred all shares in joint stock companies, held in his own name or jointly with others as also his claim to the estate to father Rameshwar Das
Birla. "Either in my own right or as a member of the family, either in present or in future, to unto or upon any property, business or assets whatsoever, I have ceased to have any interest in or authority concerning any property or business in which Raja Baldeo Dass Birla or any of his decendants are
interested," says Gajanan Birla in the letter.
The dramatic letter effectively questions Yash Birla's interest in the case but, also brought up the issue of the
Birlas' claim of being a Hindu undivided family.
77. THE EXECUTOR: On Wednesday, September 1, the Calcutta High court will decide whether Mr BK Birla can be an executor of the mutual will signed by MP and Priyamvada Birla in 1982. BK is NOT an executor according to that will. In that will, Mr & Ms MP were to be the fourth executors. The Birla counsel has now argued that since neither of them were alive now, BK should be allowed to be the fourth executor in their place.
78. COPY-PASTE: Also, the court is set to decide on Setember 1 where the Birlas need to produce the original 1982 will before the court registrar. The Brlas have so far filed only the notarised copies of he 1982 will. The Lodha counsel countered this, saying the originals should be submitted. The Birla counsel initially said that they feared the wills may be tampered with in court custody. When the court objected to this, the Birlas immediately withdrew this para from their submission.
79. PEER-LESS: In the battle with Birlas, the Lodhas have lost auditorship of several companies they have been auditing till now. But Peerless Finance have decided to reappoint Lodha & co as their auditors.
80. OPENING NEW FRONTS: The Birlas have opended a new front in the battle with Lodha, by approaching the Department of Company Affairs (DCA). An Economic Times report on September 1 said that the Birlas, through their solicitors NG Khaitan & Co have moved the DCA to prevent dividend distribution, bonus or other rights in any of the MP Birla companies till the probate plea is discharged. The plea also seeks to prevent RS Lodha from trying to block transfer of Priyamvada Birla's shares in MP companies in his name. The report adds that the Birlas may also shortly move the Company Law Board in this regard.
81. ORIGINALS PLEASE: The Calcutta High Court on September 2 rejected the application of Birlas to file a copy of the 1982 mutual will and asked the Birla counsel to produce the original will to the registrar of the court.
82. THE HEARING: The court also heard the Lodha plea to dismiss the caveats fled by members of the Birla clan. Lodha lawyer Anindiya Mitra read out a letter written by Ashok Vardhan Birla (Yash Birla's late father), nephew of MP Birla to underline the bad blood between MP and Ashok. He said Gajanan Birla had separated from the Birla mainstream and therfore could not claim to be a united family. Mitra also read out the newspaper advt issued by Gajanan Birla in 1933 transferring all his stakes in this regard. The separation deed was signed in the presence of Mahatma Gandhi. Pratap Chatterjee, the other Lodha lawyer said that there was acrimony in the Birla family and the pnly common factor among the Birlas was ther surname. He said that BK Birla's affidavit did not mention Hindu Undivided Familyk while other Birla affidavits mentioned it. He also charged that the multiple caveats and affidavits were merely an attempt to derail Priyamvada Birla's last will.
83. DELAY BY A DAY: The Birla-Lodha case was not taken up
on 9th September 2004 for hearing due to an agitation by lawyers. The case would be heard on Thursday. The hearing on the probate application of the Birlas and the applications for dismissal of caveats by RS Lodha was to begin in the court of Justice Kalyanjyoti Sengupta. However, advocates of neither side turned up.
84. SISTER ACT: The Calcutta High Court hearing the Birla-Lodha battle on September 9 allowed MP Birla's sisters to challenge the contested Priyamvada Birla will, which RS Lodha is seeking to probate. Lodha has not challenged the caveats filed by the 2 sisters.
85. SUIT: The court has also converted the sisters' caveats into a suit. Arguing on behalf of Lodha, Anindya Mitra said that KK Birla's petition to turn executor in the 1982 mutual will should be rejected. He reasoned that according to the 1982 will being projected by the Birlas, Priyamvada is the executor.
86. ONLY ORIGINALS: The Calcutta high court on September 10 asked the Lodha counsel to produce the original of the registered document of the 1999 Priyamavada Birla will in court. The next hearing is on Tuesday. The court decided to ask for the original document since the court's testamentatory dept found some discrepancies between the copy of the will filed by the Lodha counsel and the probate plea. For instance, the probate plea mentioned it Lodha as the "Sole executor" while the ocument named him as "the executor."Also, it may be recalled that the Lodha counsel had earlier insisted that the Birla side should file the original 1982 will document itself. The court had conceded that demand.
87. LODHA GOES: On Sept 13, Lodha & Co was removed as auditors by the Kolkata-based Dhunseri Tea and Industries. A resolution proposing removal of Lodha & Co. and appointment of Lovelock and Lewis as the company’s auditor was placed before the shareholders at the annual general meeting of the company this morning which was carried with requisite majority. Dhunseri Tea chairman CK Dhanuka said: "We don’t want to appoint a company which is in controversy specially at a time when group companies like South Asian Petrochemicals Limited is looking for international expansion."
88. LODHA STAYS: The same day, Shaw Wallace and Company decided to retain the services of Lodha & Co as its auditors. A Shaw Wallace board meeting rejected a proposal to remove Lodha & Co as its auditors. The company said that it was very happy with the performance of Lodha & Co as its statutory auditors.
89. LODHA FORWARD: RS Lodha received a boost on Tuesday, Sept 14, when the
Company Law Board (CLB) rejected a petition by minority shareholders
of Birla Corporation to stay the company AGM scheduled to be conducted
on Sept 15. At the AGM, the re-election of three Birla Corp directors,
including RS Lodha is to be taken up. rejecting the petition, CLB
found no reason to stay the AGM on its eve. The poll will be conducted
by voting as against the usual show of hands. The results of the poll
will not be immediately declared and all the documents relating to it
will be kept in safe custody with the company secretary. Also, till
the time the results are declared, the existing directors are allowed
to continue in their posts.
90. LODHA REVERSE: Rajendra Lodha received a setback the same day, when
the Calcutta High Court currenty hearing his probate plea (under
chlalenge from MP Birla's sisters) found several defects with his
probate petition. The court's testamentatory dept said that the
several mismatches between 2 documents filed by Lodha - the
unregistered will of Priyamvada Birla and the photocopy of the
registered will. Also, the probate plea is supposed to be verified by
one of the witnesses mentioned in the will. In this case, it was not.
It may be recalled that two of Lodha's witnesses have gone back on
their statements, saying they were unaware of the contents of the
will. The court has asked the Lodha counsel to file the originals
within 10 days.
91. VOTE BANK: RS Lodha won a moral victory of sorts on Sept 15 when he chaired the Birla Corporation AGM in Kolkata. The AGM was sought to be scuttled by a
section of shareholders, but the move was aborted by Company Law Board on Sept 14. As per CLB instruction, UTI nominee on Birla Corp bard Bhandari was
designated to chair the AGM. A secret ballot was held to decide who should chair the AGM, which Lodha won with 99.99% votes. The failed minority tried
to creat a ruckus which did not work. A Times of India report quoted unnamed Birla Corp sources as saying that the disruptive tactics were from a section
who had purchased Birla Corp shares in August with the express aim of scuttling the AGM. Speaking at the AGM, Lodha (he is currently co-chairman
of the company) said that this has been the most profitable year for the company yet.
92. MP DIED INTESTATE: At the court battle in Calcutta High court, the Lodha counsel said that the Birlas have a "right to fight" but no "caveatable interest" in the will probation. Counsel Anindya Mitra produced a letter written by KK Birla to Priyamvada Birla, the tenor of which shows that the Birlas treated her as absolute inheritor and not just executor. He also referred to a document from Khaitan & Co, solicitors of Birlas, which said that MP Birla had died intestate.
93. DECEPTIVE WILL: The 1999 will of Mrs Priyamvada Birla is full of ambiguities, a fraud on the original testator, and should be interpreted in the backdrop of her lack of formal education and failing health, counsel for the Birlas Arun Jaitley argued on September 16. He said the caveatable interest of the Birlas lies in the fact that they are keen to ensure that the property of MP Birla, who belongs to a common ancestry, goes to charity and philanthropy rather than for serving the personal interest of an individual.
Jaitley also said that the inclusion of Nandini Nopany (KK Birla's daughter) to run the day-to-day affairs of the group in the 1999 will is itself indicative of Priyamvada's intention to include the Birla members in the MP estate affairs. The next hearing is scheduled on September 22.
94. TRUST-WORTHY: Priyamvada Birla's 1999 will is a breach of trust created by
the mutual wills of 1982, the Birlas argued on Thursday, Sept 22. Counsel
Arun Jaitley said that the mutual will is irrevocable once one testator
dies, and the survivor cannot change the beneficiaries. "A floating trust
crystallises on the surviving testator," he argued. A mutual will, he said,
may be revoked only during the lifetime of both parties, and is different
from a joint will in that there is a "mutuality" of benefits. He said that
if Mr Lodha is successful in getting the probate, then the purpose of the
1982 wills would be defeated.
95. YASH-VASH: On Friday, Sept 23, counsel for the Birla families challenged
Lodha camp claims that the Birlas had been wracked by family feuds and so
have no caveatable interest. Yash Birla had performed the last rites of both
MP Birla and his widow Priyamvada Birla, lawyer PK Roy said. Yash had very
cordial relations with the MP Birla family, he said. MP made a "deed of
trust" in 1990 where Yash was named managing trustee, he said. Arun
Jaitely, the other Birla counsel termed the battle as one of philanthropy against
96. AFFIDAVIT: Media reports on Wednesday Sept 29 pointed to an affidavit which
was filed by Priyamvada Birla (and signed by Birla patriarchs) which said
that she is the sole heiress of MP Birla family. The affidavit was filed to
enable transfer of 19, Aurangazeb Road, New Delhi property in her name. The
court has asked the department concerned to produce the documents in this
97. NO PARTITION AMONG BIRLAS: On Wednesday, Sept 30, Birlas argued that the
transfer of property by MP Birla’s brother, Gajanan Birla, to his father
does not mean that there was a partition between the MP and Gajanan clans.
He said that in absence of Class I heir, the agnates ie ancestors of common
origin from the father’s side and cognates ie ancestors of common origin
from the mother’s side can inherit the property intestate. "This gives Yash
a caveatable interest," Birlas claimed. Mr Several several incidents were
cited to prove that Yash and his father Ashoke Birla had cordial
relationships with MP Birla Priyamvada.
98. CAVEAT INTEREST: On Thursday, Sept 30, Birlas argued that, under the Hindu
Succession Act, any person who has the possibility of any interest, however
remote it might be, has a caveatable interest and hence has the right to
file caveats. Mr Mukherjee cited a number of cases from various courts in
India, where courts upheld the caveatable interest of those who have even
the remotest scope of interest.
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Outsider vs. family
Camp Birla: Unity or