| Alagh, Wadia: The honours are even
Mumbai, June 11: L'affaire Britannia took a strange twist today when the biscuit major announced that Sunil Alagh had tendered his resignation as director of the company on Tuesday.
Just last week, the company had informed the Bombay Stock Exchange (BSE) that Alagh’s services as managing director had been terminated.
Interestingly, the board of Britannia is meeting here tomorrow to discuss its fourth quarter results and possibly the filling up of the vacancy caused by Alagh.
Corporate mavens were trying to read the smoke signals in the latest twist in the riveting drama that began with Alagh announcing in April that he would not seek an extension when his tenure as MD ended in February next year.
Many reckoned that Alagh’s resignation as a director of the company — a post-facto development after being forced out as MD — signalled that the warring Wadia and Alagh factions had agreed on some form of a settlement to end the sordid drama that has rocked the Bangalore-based biscuit company.
“Someone has blinked,” corporate circles said of the turn of events being enacted in the Britannia boardroom.
“He (Alagh) is probably not keen to confront the Britannia board,” sources close to Britannia said.
Grey Worldwide, Britannia’s public relations agency, was not even in the loop regarding the announcement made today in the premier stock exchanges and reiterated that there had been no change in their (Britannia’s) position.
Britannia Industries informed the stock exchanges today that S. K. Alagh has resigned as a director of the company “vide his letter of June 10, 2003”.
Does that mean the Wadias — one of the two Britannia promoters along with Groupe Danone — have relented' Legal circles say today’s announcement indicates a whiff of a “settlement” between the two parties.
Otherwise, the Alagh affair can and would have got very complicated. While the board has the powers to sack the managing director of the company, it has limited powers to sack the director of the company who is also a board member appointed by the shareholders of the company.
While the managing director is appointed by the board, the directors are appointed by the consent of the shareholders of the company, they reasoned.
This would mean that the company would have to move a special resolution to sack the director at a specially convened extraordinary general meeting, legal circles said.
“The differences between Wadia and Alagh are so great that they cannot be bridged,” sources revealed. Alagh is now seeking an honourable exit.
The dismissal of Sunil Alagh, was the climax of a stand-off with his mentor Nusli Wadia who, in alliance with Grope Danone, holds more than 39 per cent in the biscuit major.
Britannia had earlier indicated that the audit committee instituted to investigate the alleged abuse of office had revealed extravagant spending as one of the main reasons for Alagh’s removal.