It is among corporate India's most protracted battle and it shows absolutely no signs of abating. It's once again Vijay Mallya - Kishore Chhabria battle.
Nearly six-years after Vijay Mallya led UB Group took over arch-rival Shaw Wallace for Rs 1,200 crore to stub out its competitor, Mallya is understood to be moving to stem the growth of Kishore Chhabria's second innings to take on the might of UB Group.
Since exiting Shaw Wallace, Kishore Chhabria has been building Allied Blenders & Distilleries Private Limited (ABD) and has built the company with gross sales of Rs 1,500 crore by selling 16.5 million cases of spirits during last fiscal. Of this 16.5 million cases, 15.8 million cases comes from ABD's flagship whisky brand - Officers Choice, the second largest selling whisky brand in India.
According to ABD estimates, the sales of this brand is expected to cross the 20 million mark during Fy12. This growth of 27 per cent will face a stiff threat to United Spirits' whisky brands. The rapid CAGR growth of 32 per cent over the last four years and further expansion of ABD, is understood to be the crux of the new legal battle between Mallya and Chhabria.
United Spirits, India's largest spirits company from the stables of UB Group, is understood to be seeking to snip Chhabria's expansion plan by seeking to restrain ABD from raising fresh equity capital. ABD has been in the market to raise around Rs 250 crore to expand its operations from few private equity players and USL is understood to taking the legal course to stop it.
While UB Group officials did not respond to queries, ABD management could not be reached for comments.
According to legal professionals close to UB Group, in view of the merger of Shaw Wallace & Company Limited with United Spirits Limited, an application is understood to have been recently filed in the Calcutta High Court by United Spirits Limited to substitute itself in place and stead of Shaw Wallace in a suit filed in 1992 when Shaw Wallace was under the stewardship of the late Manu Chhabria – the brother of Kishore Chhabria.
In addition to seeking to be substituted as Plaintiff in the suit, United Spirits is understood to have sought an injunction to restrain Allied Blenders And Distilleries Private Limited – the successor of BDA Limited – from raising further capital and/or altering its existing share capital till disposal of an earlier suit between the two. Industry officials also further note that UB Group may also be aiming to get the rights over 'Officer Choice' through a legal battle.
This development comes close on the heels of ABD losing a trademark dispute in Supreme Court of India relating to the right of Bangalore-based John Distilleries to continue to use the trademark 'Original Choice.'
