Financial Daily from THE HINDU group of publications
Wednesday, Jan 07, 2004
Financial Daily from THE HINDU group of publications Wednesday, Jan 07, 2004 |
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Corporate
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Corporate Disputes Herbertsons: Mallya, Kishore fail to agree — UB for escrow account for shares tendered in open offer Boby Kurian
Bangalore , Jan. 6 THE UB group has stated before the Supreme Court that its Chairman, Mr Vijay Mallya's search for an out-of-court settlement with Mr Kishore Chhabria to resolve the dispute for control over Herbertsons Ltd has not progressed on expected lines. Indicating that there was no conclusive agreement between the two warring parties, UB, in an interim application filed in the apex court, has suggested a way-out to insulate the small shareholders from the ongoing legal battle. UB, through the affidavit, has sought appointment of joint custodians for an escrow account that would hold the shares tendered by the small shareholders in the wake of the public offers made by both Mr Mallya and Mr Chhabria. "Both Supreme Court and SEBI have stated that there are serious questions of law to be answered in the case. We came to the conclusion that it was not fair to keep the public shareholders hanging as the two big boys fight it out. We want the offers to go through and the shares tendered kept in an escrow account under the joint custodians, who could be the merchant bankers to the public offer made by Mr Mallya and Mr Chhabria. By this, the public shareholders will be out of their misery," a UB official said while explaining the move. On November 3, the two rivals, in a joint plea, sought advancing of the open offer dates to enable them resolve the dispute amicably. The court subsequently extended the last date for closing both the offer and the counter offer to January 30. The last date for revision of the offer and the counter was pushed to January 15 and the last date for withdrawal of offer to January 27. Mr Chhabria, who holds 49 per cent stake in the company, has made an offer for further 20 per cent shares at Rs 211 per share, while Mr Mallya, who controls 29 per cent stake, has countered with Rs 215 per share offer. Interestingly, UB's latest application comes as the Supreme Court is scheduled to hold the next hearing in the case on January 9. In August last year, SAT, in an order, regularised Mr Chhabria's stake in Herbertsons and directed him to make an open offer, a ruling that would have seen the management of Herbertsons passing from the UB group to the Kishore Chhabria camp. UB challenged SAT order in Supreme Court and sought a stay on the public offer made by Mr Chhabria. UB came up with a counter as the court refused to stay the open offer that once again raised the heat in this decade long dispute for control over Herbertsons, the third largest domestic spirits company with brands such as Bagpiper.
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