Decks cleared for Birla Corporation dividend
Over 40,000 shareholders of Birla Corporation will be able to receive the dividend announced in 2019 after a court order paved the way for the declaration of results of the voting on the resolutions that were taken up in the last annual general meeting.
A division bench of Calcutta High Court issued the order on Monday allowing Birla Corp and two other companies of MP Birla Group to publish the voting results, which also included the appointment of auditor, director on the board and the fixation of commission.
The order adds a fresh twist to the 16-year long epic battle of bequeath being fought between the Birla family and the Lodhas, who are in control of the MP Birla empire that spans across 30 companies, several prominent educational and medical institutions, trusts and charities.
BCL had declared a Rs 7.5 (75 per cent) per share dividend for 2018-19 and the voting on the resolution took place during the AGM on August 13. More than eight months have passed since then but the company could not act upon the resolution, along with six others, and pay the dividend to shareholders, including several financial institutions.
In Vindya Telelinks and Birla Cables, the declaration of results pertaining to the voting on the reappointment of Harsh V Lodha as the director on the board of these firms were also held up as in the case of BCL following an interim order of a single bench of the HC.
The single bench, which is hearing the probate of competing wills to decide who would inherit the estate of Late M.P. Birla, passed an interim order on August 9, based on a rash of petitions filed by Birla family members, asking companies not to publish results of shareholders' voting on resolutions taken up during the AGM of the three companies.
The division bench of Justices Sambuddha Chakraborty and Arindam Mukherjee had vacated the interim order and said that the single bench judge (Justice Munshi) would dispose of the main petitions.
Debanjan Mandal, partner of Fox & Mandal, the solicitor firm representing the Lodhas, said: “This is a vindication of our client’s stand that no order could be passed against third party companies which are not part of the probate suit. The results reveal what 99 per cent shareholders wanted, which is important in corporate democracy.”
While two cable firms published voting results on resolutions that did not pertain to the reappointment of Harsh Lodha, BCL could not publish the voting results of all seven resolutions, which included fixation of commission paid to Lodha. The published resolutions of the cable firms were carried with over 99 per cent majority.