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L&T shareholder moves NCLT, alleging fraud in employee fund

PALAK SHAH Rahul Wadke Mumbai | Updated on September 05, 2018

Petitioner has been filing frivolous and baseless cases: L&T

Uday Dixit, a shareholder and former employee of L&T whom the company’s top boss AM Naik had ordered to be removed from the company’s annual general meeting (AGM) last month, has approached the National Company Law Tribunal (NCLT) alleging fraud and mismanagement of employee welfare fund and assets of the company.

Dixit has claimed in his petition that the top management of L&T, including Naik, are guilty of fraud on shareholders and employees of L&T. The petition before the NCLT claims that L&T had deducted a sum from the salaries of its employees, including his, between 2003 and 2008, including his, without taking due consent. The Employee Welfare Foundation, which was registered as a trust, was converted into a private limited company and its funds were used to avail loan from ICICI Bank and purchase 15.73 per cent stake of L&T held by Grasim between 2003 and 2005.

Contribution & settlement

The petition says, even though a Memorandum of Settlement regarding wages scale and other payables to workers was signed and given to the workers by the company’s union, the same regarding the contribution of ₹2,000 per month in the form of deductions from the payables to the employees was never reflected in the settlement.

In response to queries sent by BusinessLine, the L&T spokesperson said, “Petitioner has been filing frivolous and baseless cases against L&T and its management in the past few years. Courts have already dismissed five of these cases including the Supreme Court in September 2013 and Bombay High Court in March 2018. L&T will suitably respond to the petition in the NCLT.

“The company is well within its rights to take appropriate legal action against any party wilfully maligning its reputation. As the matter is sub judice, we do not wish to comment on the specifics of the case.”

According to Dixit’s petition, employees were verbally informed in a general meeting of the union that some amount would be deducted from their salaries and equity shares of L&T for the deducted amount would be issued to the employees. However, employees were given shares of the Employee Welfare Pvt Ltd company.

There were more than 35,000 employees of L&T and through the foundation they were the largest shareholders of the company after the government.

Dixit’s response

“I have been trying to get answers to these questions from Naik, which is what I was trying to raise in the AGM. L&T has filed defamation cases against me in States including Kerala, Tamil Nadu and Bihar even though I am a long-time Mumbai resident,” Dixit told BusinessLine.

Published on September 05, 2018

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