Kamal Babbar, Joint Managing Director of Aruna Hotels Ltd, has moved the Company Law Board against the company (Aruna Hotels Ltd) for “continuously oppressing him by not implementing the resolutions towards issuing shares to him”.
Aruna Hotels is a Chennai-based listed entity promoted by industrialist P. Maruthai Pillai. Started as a sugar manufacturing company, it diversified into various other businesses and at present has only the hotel business. The name too went through several changes. Originally promoted as Aruna Sugars Ltd, it was changed to Aruna Sugars and Enterprises Ltd and then to Aruna Sunrise Hotels, before it got its present name.
According to the documents filed with the CLB’s Chennai Bench, the petitioner (Kamal Babbar) at present holds 12 lakh shares, which translates into 11.88 per cent of the total paid-up equity capital.
Submitting complaints on various other irregularities in the company’s affairs, the petitioner prayed that the CLB Bench appoint a reputed, independent firm of auditors to carry out a special audit of the company’s books of accounts, and to reconstitute the board with at least two berths for the petitioner, and a reputed person of integrity as an independent Chairman until disposal of this petition.
The document also says the company owes Punjab National Bank Rs 16.5 crore, which the bank has classified as a non performing asset. The company has more than 24,000 public shareholders including mutual funds, banks, insurance companies and foreign institutional investors, and “hence there is an urgent need to regulate the affairs of the same”, the petition points out.
It is learnt that the first hearing on this case is scheduled for December 3. Neither the petitioner nor the company’s Managing Director, M. Sivaram, could be reached for comment.
Earlier, MGM Entertainment Pvt Ltd, part of the Rs 1,500-crore MGM Group, claimed that it had picked up a 40 per cent stake in the company, but the deal had been challenged by one of the hotel’s promoters.
M.G.M. Maran, Director of MGM Group, said the company has obtained a stay from the Madras High Court against any change in the management of Aruna Hotels Ltd.
The company has a 96-room three-star property on a 60,000 sq ft plot in a prime locality in Chennai. According to sources in the hotel, it currently earns around Rs 95 lakh a month, which includes a rental income of Rs 12 lakh from over 16,500 sq ft of built-up area within the hotel compound, rented out to Speciality Restaurants Pvt Ltd.
Though a listed entity, the shares of the company are not being traded as it has not paid the necessary listing fee to the exchanges.
Last year, the hotel management had signed a pact with Fortune Hotels Pvt Ltd, a subsidiary of ITC Ltd, to run the property. However, the property has not yet been re-launched as a Fortune hotel.