Birla Corp minority shareholders to move CLB

Some minority shareholders of Birla Corporation, the M P Birla group flagship, are gearing up to move the Company Law Board (CLB) ahead of the company's annual general meeting on September 15, on grounds of mismanagement.

Sources said that the shareholders were likely to file a petition at CLB in Delhi on September 14 against the current management of the company, which is headed by Rajendra Singh Lodha as the co-chairman.

Apart from mismanagement, the shareholders would also cite oppression of minority shareholders and suppression of facts.

Legal sources said, in the short-run, they could seek an injunction on the annual general meeting or a CLB appointed chairman to preside over the meeting.

However, the final list could also demand an administrator to run Birla Corporation, till the dispute was settled in court and could also ask for freezing of voting rights of some of the M P Birla group companies having significant stake in Birla Corporation.

According to the law, for the petition to be accepted by CLB , it would require the consent of 100 shareholders or would have to be moved by shareholders with one-tenth of the share capital of Birla Corporation. Sources said, with this move, another forum was being opened to fight the Lodhas.

The shareholding pattern filed by Birla Corporation as on June 30 shows that that public holding in the company was at 8.87 per cent, institutional investors held 23.01 per cent, NRI/OCB were at 0.28 per cent and promoters holding in the company was at 61.38 per cent.

The shareholding pattern indicated that it was more likely that 100 shareholders would come together to take on the management of Birla Corporation, since public holding was below 10 per cent.

However, the Birla Corporation scrip has been on fire since the Birla-Lodha battle became public and accumulation of shares in the company by individuals was not ruled out.