The Hindu Business Line : `Birlas hold over 60 pc in Pilani Investment'

THE Birlas are not unduly worried, at least immediately, over the prospect of Mr R.S. Lodha acquiring the M.P. Birla Group's stake in Pilani Investment & Industries Corporation Ltd, the investment arm of the Birla family, according to sources close to Birla Buildings here.

The M.P. Birla Group's 25 per cent stake in Pilani Investments is held by Punjab Produce & Trading Company, an unlisted company, of which Mr Lodha is the Chairman. Mr Lodha claims that the late Priyamvada Birla, widow of M.P. Birla, had gifted the company to him.

"All the Birlas together will continue to have more than 60 per cent holding in Pilani Investments even if M.P. Birla Group's share passes into the hands of Mr Lodha," the sources observe.

The shareholding pattern of Pilani Investments is as follows: The G.P. Birla Group 25 per cent; the B.K. Birla Group 24 per cent; the S.K. Birla Group - eight per cent; the K.K. Birla Group around five per cent, and the balance 13 per cent scattered among a few others outside the family.

The value of the 25 per cent share held by the M.P. Birla Group in Pilani Investments is estimated to be around Rs 200 crore.

If the Birlas stay united, Mr Lodha, it is felt, may find it difficult to even sell those shares. Few would be prepared to pay that much of money for a minority stake, it is felt.

Meanwhile, all the Birlas, namely, Mr G.P. Birla, Mr B.K. Birla, Mr K.K. Birla, Mr S.K. Birla, Mr C.K. Birla, Mr Siddharth Birla and Mr Yashowardhan Birla, and two sisters of the late M.P. Birla — Ms Laxmi Newar and Ms Radha Mohta, have joined hands to fight a battle to stall Mr Lodha's move to gain a probable entry into the Birla empire.

The legal battle, it appears, has already started with the Birlas filing a caveat that if Mr Lodha applies for probate of Priyamvada Birla's will, he should not be heard without notice being given to the Birlas. A similar caveat has also been filed by Mr Lodha.

The Birlas have also given a lawyer's notice asking Mr Lodha to furnish a certified copy of Priyamvada's will and allowing inspection of the original document.

According to the will, the ownership of the Rs 5,000-crore M.P. Birla Group has passed on to Mr Lodha.

According to sources, serving a lawyer's notice became imperative as Mr Lodha declined to accede to Mr K.K. Birla's verbal request for submission of a copy of the will for verification.

By virtue of being co-chairman of the M.P. Birla Group, Mr Lodha might be controlling various companies under the Group but gaining ownership of the companies, as per the will of Priyamvada Birla, may not be smooth sailing.

First, he has to fight the legal battle with the Birlas who are all united now.

Second, he has take along with him the directors on the board of various companies within the Group.

He may face problems if the directors prove recalcitrant.

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