July 14, 2021
Whose ‘Will’ Will Win?
To: either/view subscribers
Good morning. Are you Richard Branson of Virgin Galactic or Jeff Bezos of Blue Origin? Nah, you’re Elon Musk, right?
If you are any of them, you could hitch a ride on Blue Origin’s New Shepherd or dream of going to Mars. As commercial space missions take off, here is your chance to become an investor and enter the space race.
But if you aren’t any of them, maybe let’s just watch ‘Space’ on television and munch some popcorn. You see, the billionaires can’t munch popcorn when in space. So, let’s draw the match!
📰 FEATURE STORY
Birlas vs Lodhas : What actually transpired over 18 years of tussle
In the ceaseless legal battle over the Birla empire, the Supreme Court dismissed the special leave petition (SLP) filed by the Birlas. The petition challenged the Calcutta High Court’s order that allowed Harsh Vardhan Lodha to chair the MP Birla Group. The apex court clarified that it would not intervene with the HC’s proceedings as the main appeals were still left to be heard. It also directed the HC to finish hearing the pending appeals of the case latest by March 31, 2022.
The Birlas argued that Harsh Vardhan Lodha be removed as the director of four MP Birla Group companies citing prior case orders. But Lodha claimed that he had not committed contempt of court and could continue to be at the helm of the companies.
The tussle between the Birlas and Lodhas started in 2004 after the then-chairman of Birla Corporation, Priyamvada Birla died. Following her death, Rajendera Singh Lodha, co-chairman and chartered accountant of the company produced her will, as of 1999, which read that her 5,000-crore assets be bequeathed to him. It also assigned RS Lodha as the head of MP Birla Group companies. This version of the will was strongly contested by the Birlas, who in turn, claimed that in July 1983, Priyamvada Birla and MP Birla had created a mutual will. As per this will, the estate fortune would be distributed for charity among the Hindustan Medical Institution, Eastern India Educational Institution and the MP Birla Foundation.
To stake their claims, each party presented different documents of proof. The court appointed an Administrator Pendente Lite, who would be responsible for the administration of the Birla estate until the resolution of the case. In 2019, an Administrator Pendente Lite (APL) committee voted against the chairmanship of RS Lodha’s son, Harsh Vardhan Lodha. Following this, in September 2020, a single bench of Calcutta HC restrained Lodha from holding office in the MP Birla Group firms. However, Lodha continued to attend the board meetings of the corporation. This triggered the Birlas to file a contempt of court against the former. The recent SC order directed that all appeals regarding this dispute be heard by March 31, 2022, till which time, Harsh Vardhan Lodha could continue his directorship.
What the Birlas say
Citing the Calcutta HC’s order in 2020, the Birlas condemned Lodha for continuing to chair the Board meetings in Birla group. In their contempt petition against Lodha, they alleged that he had wilfully violated the court order which was passed last year.
Their argument was also based on the APL committee’s decision to not support Lodha’s re-appointment as chairman of Birla Cable and Vindhya Telelinks Ltd. AC Chakrabortti, one of the APL members, stated that the committee held 62.9 percent of Priyamvada Birla’s estate. He mentioned that their objection to Lodha’s resolution was due to adverse circumstances.
Moreover, the Corporate Affairs Ministry had assented that Lodha be removed as the director of five MP Birla investment companies. They had taken the decision following APL’s voting against him.
A spokesperson from Birla’s side commented that Lodha had misinterpreted the HC order continuously, which was why he chaired the meetings. He believed that the court would restrain him from further action.
However, the Calcutta HC dismissed the contempt petition saying that Lodha did not violate the court order as his wilful disobedience was not proved beyond reasonable doubt. This order which fell against Birlas’ favour pushed them to file a SLP at the SC.
In their SLP, the Birlas maintained that dismissing the contempt petition was wrong of the HC. It stated that the HC ignored 2.37 lakh votes against Lodha’s reappointment. Senior lawyer Kapil Sibal claimed that as per the HC order, Harsh Vardhan Lodha should have complied with its directions. However, he failed to do so. He emphasized that the Birlas did not find interest in the contempt case or sending Lodha to jail. Their only demand was that Lodha be removed from his directorship.
Lodhas’ counter argument
Right after APL’s disapproval of his re-election to the MP Birla companies, Harsh Vardhan Lodha approached the Calcutta HC. His claim stated that the administrators were merely appointed to the estate. Their role was limited in terms of the companies, which were independent entities. Only Boards within the company could support or dismiss the resolution of his chairmanship.
However, the September 2020 order that restrained Lodha from holding office came as a shock. He moved the HC again to seek clarification on the order. On October 1, the HC responded that Lodha would be restricted based “on the strength of the shares referable to Priyamvada Birla’s estate.”
The order shed clarity to Lodha and he continued to attend Board meetings of Birla corporation and other listed cable companies. Lodha’s lawyer Darius Khambata stated that Lodha remained chairman of all Birla companies because he gained the majority support of 97.98 percent votes in his favour. This, he said, justified his reappointment as chairman.
While talking about APL’s opposition, Lodhas elucidated that the committee held only 1,260 shares of the Birla Corporation. Compared to the vast majority of 97.9% he secured, which consisted of 58.6 million shares of promoters, APL’s shares were very less.
Meanwhile, Senior Advocate Shyam Divan stated that the Birlas were incessant in their attempts to cause trouble to the companies. Over the years, several contempt petitions were filed and the administrators kept interfering with the company affairs. These unnecessary interventions were not restricted to the company but also harmed the third-party trusts and societies.
With both the promoter groups support and evidence of repeated intrusions into the matters of the MP Birla Group companies, the Lodhas presented that all pending appeals be heard before the HC expeditiously.
🕵️ BEYOND ECHO CHAMBERS
For the Right:
Ritual halt of Lord Jagannath’s chariot at Salabeg’s tomb is a reminder of universality of deity-devotee relation
For the Left:
River Saraswati isn’t a mystery
🏴 STATE OF THE STATES
Clean Ganga Ghats (Uttar Pradesh) – The police roped in gram pradhans of 283 villages located on the shores of Ganga, along with several government authorities and NGOs to create awareness on the maintenance of Ganga ghats. This came in after a huge controversy over the burial of bodies during the second wave of the pandemic in the banks of Ganga. The campaigns would focus on creating awareness in those villages to not bury bodies on the banks of Ganga.
Undermining Telugu (Andhra Pradesh) – BJP MP Narasimha Rao wrote a letter to Andhra Pradesh Chief Minister impelling that he should withdraw his decision on renaming the Telugu academy as ‘Telugu & Sanskrit academy’. The letter addressed the CM directly and emphasised that several decisions were made to downplay the importance of the Telugu language ever since he assumed office in the state. He asserted that the moves by the Andhra Pradesh government to abolish Telugu medium at school and college levels were also not on par with the national education policy.
Growing disquiet (West Bengal) – BJP national president JP Nadda and Bengal BJP president Dilip Ghosh had a closed-door meeting in New Delhi. This was held to discuss the rising number of dissent voices within BJP in Bengal. In this meeting, Ghosh briefed Nadda about the leaders who were raising voices against the BJP in Bengal. He also discussed members who defected from the party ahead of the state polls and others who were violating the party rules. Ghosh said that the senior party members would try to sort out the issues but would not tolerate anti-party comments.
No negative reports (Goa) – The Bombay High Court on Monday ruled that residents and people who worked in Goa could enter the state without having to provide negative reports. This order allowed people related to construction, industries and labour, businessmen in Goa and other residents who were required to travel outside of the state for work or medical reasons to enter Goa without Covid negative reports. All these people were required to provide proper certificates as proof of receiving both doses of covid vaccine. This would not be applicable to the tourists.
Cattle Bill (Assam) – On Monday, a new bill to protect cattle was proposed in Assam Legislative Assembly. This bill barred the sale and purchase of beef or related products within a 5 km radius of areas that were predominantly occupied/resided by Hindu, Sikh, Jain and other non-beef eating communities. This was a unique addition to ‘The Assam Cattle Preservation Bill,2021’. This bill drew severe criticism from the opposition. They accused that the proposed bill was brought to hurt the sentiments of Muslims. They also claimed that the bill was very ambiguous.
🔢 KEY NUMBER
$37.6 billion – Post-money valuation of Flipkart, after its recent fundraise of $3.6 billion. The new round of funding is considered the largest in Indian startup history. Notably, Softbank, which had sold its stake in Flipkart to Walmart, entered this new round with a $500 million investment.