Lodha alters name of MP Birla outfit

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By SAMBIT SAHA in Calcutta
  • Published 23.04.06

Calcutta, April 23: A matter of nomenclature has spread the clot of bad blood between the Lodhas and Birlas over the MP Birla legacy.

Birla-DLW Ltd, an MP Birla group company, now under the control of Rajendra Singh Lodha, has changed its name to Budge Budge Floorcoverings Ltd, drawing the ire of the Birlas.

The Birlas, which slapped multiple cases on the Lodhas to wrest back control of the Rs 5,000-crore MP Birla empire, are livid over the Birla name being dropped from the venture.

“Lodha has been saying that the late Priyamvada bequeathed the assets with him as she wanted to maintain the distinct identity of the MP Birla group even after her death. Yet, in reality, the name Birla has been dropped,” sources close to the Birla family said.

Birla family sources feared the change of name was part of a larger design of the Lodhas.

Birla-DLW Ltd was a joint venture company, promoted by Birla Corporation Limited, the MP Birla group flagship, and Armstrong DLW AG of Germany. It was set up in 1996 to manufacture eco-friendly linoleum floor covering at its Birlapur plant near the city. Some time back, Armstrong DLW decided to exit the company, necessitating the dropping of the DLW tag from Birla-DLW. In a statement to Birla-DLW shareholders, the company said, “The overseas partner Armstrong DLW AG has decided to exit from the joint venture and consequently a deed of settlement has been entered into between Armstrong DLW AG, Birla Corporation Ltd and the company. One of the covenants of the deed of settlement provides for deletion of any reference of DLW from the corporate name of the company.”

However, no explanation was offered as to why the ‘Birla’ name was dropped altogether.

When contacted, Harsh Lodha, director of Birla Corporation where his father RS Lodha is chairman, confirmed the change but could not recall the new name of the company.

“It is a small company. I don’t exactly remember what new name has been decided upon,” Lodha told The Telegraph.

However, A.K. Chowdhury, chief executive officer of the company, in a latter dated April 7, 2006, informed senior executives that the name has been changed from Birla-DLW Ltd to Budge Budge Floorcoverings Ltd from March 27, 2006.

Though a company can change its name, subject to approval from the registrar of companies (RoC), the move has been imparted with more twists in the light of the bitter legal battle between the Birlas and the Lodhas.

Lodha is also locked in a legal battle with the Institute of Chartered Accountants of India (ICAI) in Calcutta High Court. Three Calcutta-based chartered accountants had filed complaints against alleged professional misconduct of Lodha and his two sons. They highlighted five instances of professional misconduct on behalf of the Lodhas, the most important being the conflict of interest relating to MP Birla group companies.

They also claimed that the Lodhas are engaged in other businesses in violation of the ICAI norms.