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Mallya-Chhabria battle rages: Herbertsons may challenge Ganguli's BDA posting

Herbertsons Limited, which has filed a case against its 100 per cent subsidiary BDA Limited before the Company Law Board, may challenge the appointment of U K Ganguli as the vice-chairman of BDA, when the CLB resumes hearing on February 23.

Ganguli was appointed the vice-chairman of BDA on January 11 by the board of directors, in spite of opposition from the Herbertsons's nominees. Ganguli had earlier quit as the managing director of BDA at the annual general meeting of the company on December 31, 1998.

BDA was brought into Herbertsons fold by its chairman Kishore Chhabria in lieu of a 26 per cent stake being granted to him in Herbertsons. BDA became a wholly-owned subsidiary of Herbertsons.

A total of 153,999 shares of BDA are held by Herbertsons, while the rest of the equity is jointly held by the holding company and Chhabria's uncle, Madanlal D Chhabria.

Herbertsons had filed a petition on December 14, 1998 with the CLB's principal bench (New Delhi) under Sections 397 and 378 of the Companies Act alleging oppression and mismanagement in the affairs of BDA Limited.

Incidentally, Chhabria is the vice-chairman of Herbertsons. BDA Limited made a loss of Rs 57.4 million during the financial year ended March 31, 1998. The auditors have expressed their inability to form an opinion on the balance sheet and profit and loss account of BDA, stating that the statements do not provide information as required under the Company's Act.

In January, the CLB had passed interim orders appointing an observer for the board meetings of BDA Limited.

According to sources, Herbertsons would raise the alleged holding of share certificates of the holding company's investment in BDA Limited in Chhabria's custody.

Two investment companies belonging to Chhabria, IMFA Holdings and Shirish Finance and Investments, have also filed appeals before the CLB under Section 111 A against Herbertsons's refusal to transfer the shares lodged by them in 1997.

Shirish Finance had lodged 364,000 shares of Herbertsons for transfer, which was rejected by the company board on grounds of being violative of the Securities and Exchange Board of India Takeover Code. Similarly, the Herbertsons board rejected 54,000 shares lodged by IMFA Holdings for transfer.

The CLB would hear the appeals of Shirish Finance and IMFA Holdings in April 1999, pending completion of investigations by the SEBI.

UNI

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