Shaw Wallace braces for final battle

Calcutta, April 24: Another battle is brewing at Shaw Wallace Company (SWC) — the Calcutta-based liquor giant whose 122-year-old history stands in danger of being snuffed out through a merger with Vijay Mallya’s United Spirits.

Shareholders of Shaw Wallace are due to meet tomorrow to vote on the merger. But Shaw Wallace — whose history has been punctuated by vicious corporate battles — is now embroiled in one last fight.

Subrata K. Basu, a minority shareholder and former employee of the company, has filed a petition in Calcutta High Court seeking the appointment of a receiver for Shaw Wallace.

After the grand battles that the liquor company saw in the mid-eighties, this appears to be the fight of a minnow. Basu, who left SWC in 1992, holds only 500 shares in the company. He is contesting the valuation for the share swap deal for the merger which, he argues, is loaded against the minority shareholder.

Under the terms of the scheme of amalgamation, four United Spirits shares will be offered for every 14 shares in SWC. Basu today pleaded with the court to appoint a receiver and direct him to make a fresh valuation of the company before arriving at a new swap ratio.

Basu’s move is likely to cast a shadow across what could be the last shareholders’ meeting at Shaw Wallace.

SWC, which owns popular whisky brands such as DSP, Royal Challenge, Antiquity and vodka brand White Mischief, was bought by Vijay Mallya in 2005 from the family of Manohar ‘Manu’ Rajaram Chhabria. Chhabria and Mallya had fought together to oust the management team headed by S.P. Acharya in 1987. After they succeeded, the two partners fell out. Mallya stalked his friend turned foe for more than two decades to gain control of the company.

It was only after Chhabria’s death that Mallya was able to take over Shaw Wallace after paying Rs 1,300 crore to the Jumbo group, the holding company.

Basu admitted that his desperate move to stall the merger had been made very late. He urged the court to keep the result of tomorrow’s voting in abeyance till it disposed of his petition.

SWC shares closed at Rs 385 on the BSE today, up 4.01 per cent or Rs 14.85. United Spirits rose 9.91 per cent, or Rs 157.95, to close at Rs 1,752 on the BSE.