Chhabria-Mallya tussle hots up as BDA MD quits

Ganguli was a key figure in Chhabria’s plans, and was his candidate to replace Herbertsons managing director SD Lalla. Chhabria, who is the chairman of BDA, had informed Herbertsons representatives on January 2 of Ganguli’s "unwillingness to continue in office", a UB group release said.

At the same time, the UB group has hit back by voting against adoption of BDA Ltd’s accounts for the 1997-98 fiscal at the company’s annual general meeting (AGM), which ended with a poll on January 2. As Herbertsons which owns 100 per cent stake in BDA is controlled by the UB group, Chhabria was not in a position to counter the UB group move.

Herbertsons has also opposed the resolution of increasing BDA’s borrowing limit from Rs25 crore to Rs 50 crore.

The BDA AGM was held in Mumbai on December 31. With the Herbertsons representatives demanding a poll for all the seven listed resolutions, chairman Chhabria deferred the voting to January 2.

According to the release, on the day of polling, Chhabria informed the representatives that the resolution on re-appointment of Ganguli as BDA’s managing director was being withdrawn, as he had resigned.

Sources, however, said that this could be a strategy of Chhabria as he expected opposition from the Mallya camp on Ganguli’s re-appointment. Chhabria had earlier snatched BDA, which he directly controls, from estranged elder brother Manu Chhabria, the chairman of Shaw Wallace, after a protracted legal battle in the mid-1990s.

Mallya, Manu’s former ally and now an arch rival, had then decided to back Kishore, and offered him a 26 per cent stake in Herbertsons. As part of the deal, BDA became a wholly-owned subsidiary of Herbertsons.

Since then, Kishore has gone on to increase his stake inHerbertsons through market purchases, and now holds around 50.32 per cent, more than Mallya’s stake of about 35 per cent. Till now, Mallya has agreed to transfer only 43 per cent to the Chhabrias.

Markets regulator the Securities & Exchange Board of India (Sebi) is probing whether Chhabria’s stake hike in Herbertsons has triggered the takeover code. The Chhabria camp is leaving no stones unturned to buttress its case that its mop-up of Herbertsons shares did not trigger the code. At the Herbertsons AGM, which too went to the ballot box, Chhabria, who is the company’s vice-chairman, had sought to replace the Herbertsons directors with his nominees. The poll’s result will be announced later.