Harsh Lodha ousted from boards of 5 MP Birla firms

Our Bureau Kolkata | Updated on November 19, 2020

Lodhas move court against action

The Lodhas have filed applications in the Calcutta High Court challenging the ouster of Harsh Vardhan Lodha as director of five investment companies of the MP Birla Group.

The companies from which he has been ousted are East India Investment, Gwalior Webbing, Baroda Agents and Trading Co, The Punjab Produce & Trading Co, and Punjab Produce Holdings.

“The Corporate Affairs Ministry on November 18 approved and accepted the cessation of directorship of Lodha as recorded by the board of directors of these companies headed by the judicial member of the court-appointed APL Committee (an administrative panel). The decision was based on the decision of a Single Bench of the Calcutta High Court dated September 18, 2020 and approved by the Division Bench of the said High Court on October 1, 2020,” said a spokesperson for the Birlas.


The extended Birla family, which is contesting a will of the late Priyamvada Birla — produced by a former auditor of the group companies naming him as the sole inheritor of the ₹5,000-crore business empire — said it will initiate contempt of court proceedings against Lodha, the concerned companies and their directors.

It is to be noted that the Division Bench of the Calcutta High Court had, on October 1, declined an ad interim stay on the Single Bench order directing the removal of Lodha from all the positions within the MP Birla Group during pendency of the suit involving the contested will of Priyamvada Birla.


However, the Division Bench had clarified that the restriction on Lodha from holding any office in any of the entities of the group would be “on the strength of shares referable to the estate of Priyamvada Birla”.

According to the spokesperson for the Birlas, Lodha’s attorney deliberately interpreted the order to limit the purview of the court order only to an alleged minuscule shareholding of the estate, ignoring the well-established corporate practice and commonly prevailing structure of control through holding of shares directly and indirectly by way of cross, chain and interlinked shareholding among the promoter group constituents.

Hearing from Friday

The applications challenging the removal of Lodha from the five investment companies will be heard by the Calcutta High Court, starting November 20, for permanent and interim relief.

According to the Lodhas, Justice Mohit S Shah and AC Chakrabortti, as members of the APL Committee, formed the opinion that Lodha automatically ceased to be a director of these and other MP Birla Group entities by virtue of the verdict dated September 18 passed by Justice Shahidullah Munshi even after it was modified by an interim order of the Division Bench.

The interim order of the Division Bench made it clear that he was barred from holding office in the MP Birla Group only on the strength of the shares of the Priyamvada Birla Estate.

In four of these investment companies, Lodha was not reappointed director on the strength of the estate. In the fifth one, Gwalior Webbing, the estate’s ownership is 50.43 per cent. In one of these holding companies, the estate does not hold any share at all, and in another its ownership is a mere 0.08 per cent.

“All the actions taken by Shah in the past one-and-a-half months were completely illegitimate exploitations of the verdict of Justice Munshi, which is under challenge. These actions were taken in gross disregard of modifications made by Chief Justice TB Nair Radhakrishnan and Justice Shampa Sarkar,” said Debanjan Mandal, Partner, Fox & Mandal, representing Lodha.

Published on November 19, 2020

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