Finally, both Reckitt Benckiser and TTK group have agreed to have an independent consultant, Ernst & Young, to value TTK-LIG, maker of ‘Durex' and ‘Kohinoor' brand condoms. The valuation process is expected to take two months' time.

A few weeks ago, to end the deadlock between Reckitt Benckiser and the TTK Group, the Company Law Board (CLB) had asked both companies to suggest an independent entity to value the shares of TTK-LIG. Reckitt had suggested KPMG and Ernst & Young while the TTK Group had suggested Deloitte and an Indian audit firm.

During CLB proceedings on Tuesday, TTK's lawyer argued that KPMG being the auditor of the company was not suitable to value the company. On the contrary, Reckitt counsel argued that Deloitte was comparatively “a smaller consultant” compared with the other three international consultants and firmly argued against a local consultant firm valuing the company. Therefore finally both the parties agreed on choosing Ernst & Young.

There was a disagreement on the cut-off date to value the company. TTK wanted it to be March 31, 2011 while Reckitt wanted it closer to May. Three months ago Reckitt had moved CLB, complaining that it did not have equal representation on the TTK-LIG board and that the Chennai company was not supplying condoms to the UK parent. Reckitt Benckiser through its global acquisition of SSL is a partner of TTK-LIG.

Reckitt argued that a later date (rather than March 31, 2011) would reflect the current financial position of the company as 25 per cent of the revenues had been impacted due to supply to SSL being stopped. Close to 80 per cent of TTK-LIG's revenue comes from exports to SSL and the remaining from supply to Government. Ms Lizamma Augustine, Member of the CLB, Chennai Bench, said while the cut-off date will be fixed as March 31, 2011, the valuing consultant should take into consideration the revenue loss due to subsequent events.

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