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Herbertsons' row: Court assured of peaceful Dec 30 AGM, board recast decision on Feb 9

Kishore Chhabria and his group and Maganti Sreenivasulu Reddy and his Balaji group today agreed before Justice D K Deshmukh of Bombay high court to carry on the 61st annual general meeting of Herbertsons' Limited in Bombay on December 30 and pass all necessary resolutions including declaration of dividend, adoption of balance sheet and appointment of auditors by show of hands without any opposition.

However, all other matters related to appointment of directors would be taken up for consideration and if necessary, poll would be conducted subject to the conditions that the votes of disputed shareholders would be kept in separate covers under the seal of the company and sealed by the chairman of the meeting in the presence of a court representative before depositing the covers with the court official.

In an ad-interim order, Justice Deshmukh said that the decision on appointment or removal of existing directors of the company would be taken during the final hearing of the case on February 9, 1999.

The matter came up today before the court following an application made by the plaintiffs M S Reddy challenging the notice given by Kishore Chhabria for removing the nine out of 12 existing directors of the Herbertsons board including chairman Vijay Mallya.

Chhabria who owned 26 per cent shareholding of the company in exchange of merging his company BDA Limited, had been acquiring the Herbertsons shares from the market for the past several years without anybody's notice. Only a recent income-tax raid on Chhabria allegedly revealed that he and his group had acquired an additional 21 per cent shareholding in the company and became the majority shareholder.

This provoked another major shareholder M S Reddy and his Balaji group (over five per cent) which is a major bottler and distributor of Herbertsons, to file a suit in Bombay high court in October last year praying for freezing the voting rights of 21 per cent shareholding of Chhabria.

However, in light of the forthcoming AGM, Reddy and his group again moved the court seeking a direction for avoiding any adjourment and stalling of proceedings of the meeting.

Today's court order would keep the existing board and its chairman Mallya undisturbed until the controversy over the Chabria raid on Herbertson shares and its validity is decided by the court in future.

As per the company's AGM notice, three new directors were to be appointed in place of retiring members C L Jain, R M Parekh and S K Diwanji. Chhabria wanted to remove six other additional directors including Mallya from the board and appoint his own people on the board to get full control of the company.

UNI

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