Will cloud over Century AGM

Century Textiles and Industries' annual general meeting (AGM), normally a sedate affair, has assumed importance as it is expected to throw light on a host of issues that that have risen following dispensation of Rs 5,000 crore worth of assets of the M P Birla group to Rajen S Lodha.

The most important chunk of the assets is the M P Birla group's 25 per cent stake in Pilani Investment and Industries Corporation Ltd, the investment arm of the Birlas. Pilani holds 3.38 crore shares in Century of the promoters holding of 4.17 crore shares, which translate into 44.87 per cent stake.

"The 107th AGM, slated to be held in Mumbai, may not wash the dirty linen in public but will certainly throw light on the state of affairs of the company, especially the shareholding and the board of directors," said an analyst who tracks Birla group companies.

Sudarshan Kumar Birla, a director, will preside over the meeting in the absence of the chairman Basant Kumar Birla.

The company had proposed to re-appoint Priyamvada Birla "" who bequethed the assets to Lodha "" as a director at the forthcoming AGM. She joined the Century board four years ago. The Pilani shareholders are keen to know what is going to happen with the company if the court finds Lodha's claim bona fide. In addition, they will also seek clarification on whether the company will appoint a director to fill in the vacancy being created with the demise of Priyamavada Birla.

It is highly unlikely that Lodha, even if he manages to establish his claim over the assets, will be able to take the shares out of the promoters' block and sell it to an outsider.

The Century board comprises chairman B K Birla and other directors namely Pradip Kumar Daga, Sudarshan Kumar Birla, Arvind C Dalal, Chandra Kant Birla and B L Jain.

It is not known whether Lodha will ask for a seat on the Century board in future. There are vacancies on the board as representatives of LIC, Unit Trust of India and Industiral Developement Bank of India relinquished their positions.

In fact, Century plans to move a resolution, under Section 258 of the Companies Act to reduce the number of directors from 11 to 8.

Century Textiles, the jewel in the Birla crown, was among the first take over by legendary Ghanshyam Das Birla. Promoted as Century Spinning & Weaving Mills by the Wadia family in 1898, it had passes in 1951 to Chunilal Mehta, a nephew of Walchand Hirachand.

During the split of assets among the Birlas after the death of G D Birla, the managing control passed to the B K Birla group.