The Hindu Business Line : Herbertsons, BDA meetings — UB, Kishore Chhabria to jointly seek lifting of court injunction

THE UB Group and the Kishore Chhabria Group of companies have decided to move a joint application before the Bombay High Court to lift a seven-year-old injunction against holding the annual general meeting of Herbertsons Ltd and the board meetings of BDA Ltd.

When contacted, officials in both camps confirmed the move.

In 1998, the Bombay High Court had granted injunction on a UB Group plea against holding Herbertsons Ltd's AGM and the BDA's board meetings. This came at the height of a boardroom tussle between the UB Group Chairman, Mr Vijay Mallya, and Mr Kishore Chhabria, for control over Herbertsons, of which BDA was a subsidiary. Earlier this year, both the camps reached an out-of-court settlement, with Mr Chhabria selling 49 per cent stake to UB for Rs 131.16 crore. The deal later received a nod from the Supreme Court.

The joint application to lift the injunction will help both BDA, now an independent entity managed by Mr Chhabria, and Herbertsons to go ahead with their plans. Mr Chhabria is set to revamp the BDA board after he walked out of Herbertsons following the deal. BDA needs to convene its board meeting to accept the resignations of the four UB nominees who had put in their papers as the company came out of the Herbertsons fold.

Meanwhile, UB Group has announced plans to merge Herbertsons along with Mr Mallya's other spirits companies into a single entity called United Spirits Ltd, which is slated to happen in the next four to six months time. This comes in the wake of Mr Mallya's acquisition of Shaw Wallace & Co (SWC), giving him 50 per cent share of the Indian Made Foreign Liquor (IMFL) market. Mr Mallya expects significant cost savings from the consolidation process.

Mr Chhabria is giving a facelift to BDA, which owns the popular Officers' Choice Whisky. He has roped in a leading consulting firm to push ahead with a major equity and financial restructuring of the company, which for almost a decade was caught in the crossfire between Mr Mallya and Mr Chhabria for control over Herbertsons. BDA has roped in a few former UB officials to steer its operational management even as it has agreed to work in tandem with Mr Mallya's spirits empire for synergistic gains, which will help both the camps in improving their profitability.

As part of the marketplace bonhomie, UB has disclosed that it will not pursue SWC's legal case against BDA. The move, observers said, will bury the remnants of an acrimonious past even though the case against BDA had become largely defunct following the demise of SWC's former Chairman, Manu Chhabria, in 2002.

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