Financial Daily from THE HINDU group of publications
Thursday, Feb 10, 2005
Financial Daily from THE HINDU group of publications Thursday, Feb 10, 2005 |
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Marketing
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Brands BPL Comm stakes claim to use brand BPL till 2008 Boby Kurian
Bangalore , Feb. 9 BPL Communications Ltd, the holding company of Mr Rajeev Chandrasekhar-managed cellular service providers, has said it has an irrevocable licensing agreement with the TPG Nambiar family to use the BPL brand up to 2008 and sought recognition for keeping the brand name alive even as its parent consumer durables business struggled in recent years. The company is at the centre of a family feud between BPL patriarch Mr T.P.G Nambiar and his son-in-law Mr Chandrasekhar over shareholding, with the former claiming that the cellular service operations had leveraged heavily on the BPL name and the resources of its once strong traditional business, while establishing itself in the 90s. This is apart from Mr Nambiar's and BPL Ltd's claim that they had pumped in investments and also facilitated loans and guarantees to the infant mobile service business, which the Rajeev Chandrasekhar camp claim they repaid by 1999. Mr Nambiar is staking claim to nearly 31 per cent shareholding - against the current 8-9 per cent - in BPL Communications Ltd, which he held as the mobile service business rolled out almost 10 years ago. Mr Chandrasekhar along with persons acting in concert hold over 51 per cent stake with his direct personal holding pegged at 38 per cent. "We have a licensing agreement with BPL Ltd, the flagship business of the Nambiar family, to use the BPL brand till 2008. It is a 10-year agreement signed somewhere in 1997-98. It is a fact that mobile service operations leveraged on the BPL brand in the initial years, but we have repaid that goodwill by keeping the brand alive in recent years with the parent business struggling under mounting debts and a pile of legal cases," officials in BPL Communications Ltd told Business Line. They said the licensing agreement entailed some annual financial consideration but did not disclose details. Sources said the BPL brand continued to command significant equity in markets such as Kerala, Tamil Nadu, Maharashtra and Mumbai, where BPL Communication operates the cellular service business, and in their view, has helped attract a better valuation for the parent company while striking the recent joint venture deal with Sanyo for the mainstay colour television business. "For us, the brand has at times become a liability now, as our business gets clubbed with the ailing consumer durables business, which is fighting cases and facing liquidation proceedings," sources said. "In fact, Mr Chandrasekhar had toyed with the idea of giving the brand back but dropped the plan as it would have sent wrong signals to BPL Ltd's creditors and stakeholders," sources added. The simmering dispute between the BPL patriarch and his son-in-law entered the public domain when the former moved the Company Law Board (CLB) principal bench in Delhi over shareholding in BPL Communications. The case was dismissed citing jurisdictional issues, and Mr Nambiar is expected to move the Additional principal bench of CLB in Chennai as third-party mediation has failed and the two camps hardening their respective stance.
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