CLB reserves order on Birla Corp control

The Company Law Board (CLB) today reserved order on a petition seeking probe into who controls the M P Birla group flagship company Birla Corporation while posting for March 17 the hearing on another petition alleging "oppression and mismanagement" by the current management.

CLB chairman S Balasubramanian reserved his order after hearing arguments of both the parties, which sought the bench's intervention under Section 247 and 250 of the Companies Act.

Even as the petitioners sought clarity on the issue of who controlled the company after the death of M P Birla's wife Priyamvada Birla in July last year, the respondents contended that the matter was subjudice as dispute of two contradictory wills was pending before the Calcutta High Court one of which is in 'favour' of R S Lodha.

The respondents' counsel alleged that the petition, seeking probe into the company's shareholding, was "malafide" and "motivated" as the petitioners themselves stated that Lodha was in control of the group after Priyamvada's death.

Such an investigation was required only if there was apprehension of involvement of hawala operators and other shady entities in a company's financial affairs, the respondents' counsel argued, adding this was not the case here.

In the other petition under section 397/398, five petitioners, supported by 134 shareholders of the company, had approached the CLB last year alleging "oppression and mismanagement" in the company's affairs after Priyamvada's death.