The Company Law Board today directed Connaught Plaza Restaurants Pvt Ltd (CPRL), a joint venture between American food chain McDonald's and its estranged Indian partner Vikram Bakshi, to maintain status quo on shareholding and board pattern.
Passing an interim order, CLB asked McDonald's India, its parent firm and nominee directors on the JV to file short affidavits before September 20.
"Respondents are directed to file short affidavits on or before September 20, 2013. Since the bench has already heard the matter, it is of opinion that there should be a status quo in respect of shareholding and board pattern and the right of the call option until the next date of hearing on September 25, 2013," said CLB member B S V Prakash Kumar in his order.
More From This Section
CLB's direction came over a petition filed by Indian partner of McDonald's Vikram Bakshi challenging his removal as the Managing Director of the joint venture.
In a public notice on August 30, McDonald's India said: "Vikram Bakshi has ceased to be the Managing Director of Connaught Plaza Restaurants pursuant to expiration of Bakshi's term on July 17."
Incorporated in June 1995, CPRL is a 50:50 joint venture between McDonald's Corporation and Vikram Bakshi and it has been running fast food outlets in North and East India.
In his petition to the CLB, Bakshi had accused the American fast food chain "of implementing a pre-determined scheme of attempt to take over the Company (CPRL) in a coercive, oppressive and illegal manner contrary to law".
During the proceedings, senior advocate Sudipto Sarkar for McDonalds India Pvt Ltd (MIPL) denied the allegation of 'oppression' by the company and said that US food chain has lost confidence in Bakshi and was not satisfied with his conducts.
Sarkar further said Bakshi's two year contract as Managing Director MIPL had "proposed to form a management committee -- one from our and other from his side, but he wants sole management"
Moreover, he further added that the company has lost trust because he had pledged his CPRL shares to raise funds for his other business Ascot Estate (Manesar) Pvt Ltd and the pledge was extended also.
Concluding his arguments for interim relief, Vikram
Bakshi's counsel S N Mukherjee submitted that his client has right to manage the company and such denial is an act of oppression.
"It is denial of management, and is an act of oppression... He fulfils condition to be a Managing Director," he said.
On the next date of hearing later this month, Senior advocate Rajiv Nayyar would argue on behalf of Robert Dale Larson and Ayesel Melbye, two independent directors nominated by McDonald's on CPRL board.