Financial Daily from THE HINDU group of publications
Tuesday, Feb 15, 2005
Financial Daily from THE HINDU group of publications Tuesday, Feb 15, 2005 |
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Corporate
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Corporate Disputes Kishore Chhabria transfers stake in Herbertsons to escrow agent — Wants amicable out-of-court deal for Rs 131 cr Boby Kurian
Bangalore , Feb. 14 BRINGING the curtains down on a decade-long tussle with the UB Group Chairman, Mr Vijay Mallya, for control over Herbertsons Ltd, Mr Kishore Chhabria has deposited his entire 49.06 per cent holding in the country's third largest spirits company to an escrow agent. The agent has been appointed to facilitate an amicable out-of-court settlement between the two warring liquor barons for a consideration of Rs 131 crore. Mr Chhabria's shares and Mr Mallya's purchase value for the same are currently parked with the escrow agent, Mr M.L. Bhakta, a partner with solicitors Kanga & Co and also a founder director of Reliance Industries Ltd. Both camps have also given their consent papers to Mr Bhakta, who is scheduled to meet Mr Fali Nariman and Mr Harish Salve, legal counsels for Mr Mallya and Mr Chhabria respectively. The counsels for the two sides will inform the Supreme Court, which is seized of the matter, when it meets next. "The curtain has finally fallen. But the actors will have to remain on stage for another week," a UB Group official told Business Line. A constitutional bench of the apex court looking into the legal dispute between the two camps, which was scheduled to sit this week, has postponed its session to next week for administrative reasons. The Securities Exchange Board of India (SEBI), which is party to the legal proceedings, has given a conditional nod to the amicable settlement. With this, Mr Mallya, who already controls 38 per cent stake, now gains virtually complete control over Herbertsons, which owns powerful brands such as Bagpiper Whisky and Honey Bee Brandy. As part of the deal, Mr Chhabria will walk out with subsidiary, BDA Ltd, even though informed sources did not divulge details regarding de-subsidiarisation of the said company citing strategic reasons. Mr Chhabria had brought BDA along with him when he joined hands with Mr Mallya in Herbertsons in 1992. "What we will tell you now is that BDA has been restored the 1992 status," sources said. While Mr Mallya has outlined his plans to merge Herbertsons with the rest of his spirits interests, it is not yet clear what road Mr Chhabria would take from here. BDA owns a powerful brand, Officer's Choice whisky, with annual depletions of over four million cases. Mr Kishore Chhabria came out of Shaw Wallace & Co Ltd in 1992 after a bitter split with his elder brother the late Manu Chhabria and joined forces with Mr Mallya. But the rendezvous did not last long as the relationship soured with Mr Mallya accusing his partner for quietly increasingly the shareholding, and the latter claiming control over a company.
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