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The Company Law Board (CLB), on Wednesday, decided to hear the case based on the petition filed by Vikram Bakshi, the Indian partner of the US-based fast food chain McDonald’s, challenging his removal as the managing director of the joint venture entity Connaught Plaza Restaurants Pvt Ltd, on October 3, 2013.
The case was scheduled for a hearing on Wednesday.
The CLB has directed McDonald’s and Vikram Bakshi to maintain status quo on shareholding and board pattern and the right of the call option until the next date of hearing on October 3. Meanwhile, Bakshi was asked to file response to the affidavits filed by McDonald’s within the next seven days.
Interestingly, the present board of Connaught Plaza Restaurants is scheduled to meet on September 30.
Bakshi moved CLB after McDonald’s, in a public notice dated August 30, said: “Vikram Bakshi has ceased to be the Managing Director of Connaught Plaza Restaurants pursuant to expiration of Bakshi's term on July 17.”
Speaking to reporters after the CLB hearing today, Bakshi said: “The business must continue for the good of the company and the brand.”
Bakshi had, in his petition, requested the CLB to break the ‘deadlock’ as the four-member board of the joint venture company is divided on whether or not to allow him to continue as managing director. Bakshi has also said the American fast food chain was trying to implement a pre-determined scheme of attempt to take over the Company (Connaught Plaza Restaurants) in a coercive, oppressive and illegal manner contrary to law.
Connaught Plaza Restaurants was incorporated in 1995 as a 50:50 joint venture between McDonald’s Corporation and Vikram Bakshi. It operates McDonald’s stores in north and east India.
In the south and west regions of India McDonald’s operates through a different franchise BL-Jatia Group-promoted Hardcastle Restaurants. Jatias had also started as a 50:50 JV with McDonald’s but had bought over the 50% stake of the US company a few years ago.
