Date:16/10/2004 URL: http://www.thehindubusinessline.com/2004/10/16/stories/2004101602970400.htm

Back CLB directs trust to retransfer Birla Corp shares to itself

Richa Mishra

New Delhi , Oct. 15

THE Company Law Board (CLB) has directed All India Hindu (Arya) Dharma Seva Sang Trust to retransfer to itself by October 30, as many as 27,480 shares of Birla Corporation Ltd held by it.

The Bench was considering two applications filed by Birla Corporation seeking dismissal of the petitions filed by a section of shareholders of the company before the board alleging it to be motivated.

In its applications, the company submitted that in violation of the interim order passed by the CLB on September 14, restraining any transfer of shares, the trust had transferred the said number of shares held in the company.

Regarding the issue whether the petition was motivated or for collateral purposes, the CLB Principal Bench, comprising Mr S. Balasubramanian, Chairman, said: "It cannot be decided without going into the merits of the case. Therefore, I propose to consider the applications along with the main petitions."

Giving time to both the parties concerned to file their replies and rejoinders to the main petitions, the board said that the petitions and the applications would be heard in February 2005.

It may be recalled that five shareholders of Birla Corporation, with the consent of 134 other shareholders, had approached the CLB alleging oppression and mismanagement in the affairs of the company and investigation into the ownership of the shares of group companies.

The company, in its applications to the CLB, submitted that of the 134 consenting shareholders, 133 had become shareholders only after the notice of the AGM of the company was issued.

"It is apparent that they acquired the shares only for the purpose of meeting the qualification to file this petition," said Birla Corporation in its applications.

Further, of these 133, 109 had acquired shares from Mr Dharam Chand Dharewa through an off-market transaction. According to the company, Mr Dharewa is closely connected with the B.K. Birla group; the five shareholders are also closely associated with the group.

Besides, the company expressed apprehensions that any answers to the allegations in the petition would affect its interests in the proceedings before the Calcutta High Court.