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The Company Law Board has granted an interim stay on the proposed joint development of Aruna Hotels’ property in the heart of Chennai, after a stakeholder challenged the plan.
In the interim order on April 9, the CLB advised the respondents, including M Shivaram, Chairman and Managing Director of Aruna Hotels; Kartick Shivaram, Executive Director; and the Directors S Kalyanam, CL Ravichandran, and Kamal Babbar, to refrain from selling or creating any third party interest in the property.
The nearly 1.2-acre property, estimated at over ₹200 crore, is located in Nungambakkam, a prime location in the heart of Chennai.
Justice Kanthi Narahari of the CLB’s Chennai Bench appointed M Kannan, Bench Officer, as Commissioner to authenticate the minutes of the board, general body and other statutory records of the company from 2010 to date.
According to the documents available with Business Line , the petitioner – Subasri Realty Pvt Ltd, a major shareholder in the company— says the respondents closed the hotel for the past two months, terminated the services of all employees and have entered into an agreement with a property developer.
They received an advance and also issued notices to the tenants of the premises to vacate. The intention of the respondents was to divert the business of the company, adds the petitioner.
The respondents, in turn, submitted that the board is entitled to take decision with regard to the affairs of the company and its plan is to restructure the business and diversify into a more “lucrative and new type of hospitality business”.
One of the respondents, Kamal Babbar, another shareholder, in a separate counter-petition, submitted that he was not involved in any of these activities and said the other respondents have entered into an agreement with the property developer KGEYES Builders for a joint development.
Chairman Shivaram and Kartick Shivaram had received over ₹10 crore in cash and a huge amount by cheques and paid it to Punjab National Bank against their borrowings from the bank, he said.
Respondents mum
On hearing the counsels of all sides, the Judge has said the respondents have not given any cogent reasons with regard to the apprehensions expressed by the petitioners.
The court also observed that the respondents did not even give an answer to a straight question by the Bench that whether their intention was to sell the property.
Earlier, Babbar separately obtained a stay from the Madras High Court against the proposed sale of the property.
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