Calcutta HC removes Harsh Vardhan Lodha from MP Birla group

The court’s ruling is a significant victory for the extended Birla family, which is contesting the legal validity of Priyamvada Birla’s Will.

The Calcutta excessive courtroom on Friday ordered the elimination of Harsh Vardhan Lodha from directorships and different positions within the trusts and societies of the MP Birla group of corporations.

With this Lodha, who has fought for nearly a decade to retain management of cement maker Birla Corp. and the MP Birla group corporations, will likely be eliminated with quick impact from all firm positions. The courtroom’s ruling is a major victory for the prolonged Birla household, which is contesting the authorized validity of Priyamvada Birla’s Will.

The two sides have been locked in a battle for 18 years over the Will wherein Priyamvada Birla bequeathed her property and management of the now ₹25,000 crore MP Birla empire to her chartered accountant RS Lodha and his second son Harsh Vardhan Lodha.

Lodha will even be eliminated as chairman of the group’s flagship firm Birla Corp. and as a director on the boards of different MP Birla corporations, together with listed companies Vindhya Telelinks Ltd, Birla Cables Ltd and Universal Cables Ltd.

In May, a two-judge division bench of the Calcutta excessive courtroom had allowed Lodha’s reappointment as director by rotation in a few of these companies.

Lodha was additionally particularly entitled to a profit-related fee in these companies, which was authorized on the corporations’ annual normal conferences. The Birla household challenged this appointment within the Supreme Court, but it surely redirected the case to the excessive courtroom.

On Friday, the courtroom stated all majority selections taken by the court-appointed Administrator Pendente Lite committee (a panel of directors appointed in 2012) will likely be binding on Lodha and that he will likely be obliged to implement them. In 2019 and 2020, the committee had directed Lodha’s elimination from the boards and had refused to assist the fee of any profit-linked remuneration to him, however these selections weren’t applied.

“These directions mean that Harsh Vardhan Lodha immediately ceases to hold all positions in the MP Birla Group, including as director in the companies and other positions in the trusts and societies of the MP Birla Group,” a Birla household assertion stated. “The court held that since the companies are not parties to the testamentary proceedings, directions cannot be passed against them, but the decisions of the committee of administrators shall be implemented by Lodhas, who are plaintiffs in the testamentary proceedings. His stranglehold on the MP Birla group has been brought to an end by the Calcutta high court.”

A lawyer for Lodha stated the order will likely be challenged.

“The verdict by Justice Sahidullah Munshi over the reappointment of Harsh Vardhan Lodha as a director of Vindhya Telelinks Ltd and Birla Cable Ltd does not appear to be lawful,” stated Debanjan Mandal, associate, Fox & Mandal, legal professionals for Harsh Vardhan Lodha. “Our clients’ confidence in the system remains completely unshaken, and our clients will challenge the judgement for immediate and long-term relief.”

A Lodha assertion stated: “It has all along been the case of the Lodhas that the probate court examining the validity of a Will has no jurisdiction over any company in which the Late Priyamvada Birla held shares.”

“The company will examine the judgement and take necessary steps, including filing of appeal because the verdict seems to have ignored shareholders’ democracy and their right to elect by majority of their votes a person as a director of a company. Shareholders have elected Harsh Varshan Lodha as a director of Birla Corp. with an overwhelming majority of 98%. Mr Lodha, being otherwise not disqualified from holding the office of director, there is no reason why the verdict of shareholders will not be respected,” a Birla Corp. spokesperson stated.

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