Financial Daily from THE HINDU group of publications
Thursday, Jul 15, 2004
Financial Daily from THE HINDU group of publications Thursday, Jul 15, 2004 |
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Corporate Disputes Corporate - Corporate Disputes Control of MP Birla group — Universal Cables, Vindhya Telelinks hold the key Suresh Krishnamurthy
IT IS a complex web of interconnected ownership. But as the battle for control of MP Birla group companies hots up, the key to the eventual control of listed companies in the group centres on Universal Cables and Vindhya Telelinks. This is because by controlling Universal Cables and Vindhya Telelinks, control over the other two listed entities - Birla Corporation, and Birla Ericcson is assured. Vindhya Telelinks along with its subsidiaries and Universal Cable together hold a stake of about 44.7 per cent in Birla Corporation. Universal Cables and Vindhya Telelinks also hold together a stake of 29 per cent in Birla Ericcson, in which Ericcson Cables AB of Sweden holds a stake of 27.5 per cent. That is not all. Vindhya Telelinks holds 15.7 per cent in Universal Cables. Universal Cables, in turn, holds a 29 per cent stake in Vindhya Telelinks. Control of Universal Cables and Vindhya Telelinks is, therefore, essential to gain control of the other two companies. Another key group company is an unlisted entity - Punjab Produce & Trading Company. This company holds 14 per cent in Universal Cables and 10 per cent in Vindhya Telelinks. Controlling this entity is also crucial since that along with Vindhya Telelinks and Universal Cables would effectively place sizeable controlling power in the hands of the holder. The market capitalisation of the four group companies aggregate to Rs 843 crore and the prized asset is Birla Corp, whose capitalisation alone is about Rs 737 crore.
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