Transfer of shares restrained in LML case

KANPUR, July 22: The Kanpur civil court today restrained Piaggio and its Indian partner in LML Ltd, Singhanias, from transferring the dis...

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KANPUR, July 22: The Kanpur civil court today restrained Piaggio and its Indian partner in LML Ltd, Singhanias, from transferring the disputed shares of the company held by the Italian two-wheeler giant.

In an interim order, senior civil judge Ashok Kumar restrained the Italian two-wheeler maker from transferring the shares held by Piaggio as well as the Singhanias from registering shares on any such transfer. The next date for hearing has been fixed for August 13.

Singhanias had moved the court seeking directives for transferring of 23.6 per cent shares held by Piaggio following death of its owner Giovanni Agnelli in December last year. The court allowed further time to Piaggio for filing a reply in the case.

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Counsel for the defendants, Piaggio B V, Piaggio VE and Piaggio Vespa – Sunil Khaitan – sought more time pleading that the defendants had not received the complete papers filed by the Singhanias along with the summons.

Former attorney general Milon Kumar Bannerjee, appearing for the Singhaniasargued that the intention of the foreign collaborator was to hold and control the LML group by appointing their own directors in India.

Apprehensions of sharing management control of LML Ltd with Piaggio is one of the reasons behind the Singhanias’ decision to move court to acquire 23.6 per cent shares from its Italian partner, company sources said.

The Singhanias feared past mistakes would be repeated after the death of Piaggio’s owner Giovanni Agnelli in December last and therefore, sought to exercise a clause in the 1994 joint venture agreement (JVA), highly placed sources revealed. The 1994 clause gives the Indian promoters total managerial control of the company and the right to acquire Agnelli’s stake in the event of his death.

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After failing to acquire Piaggio’s stake, the Indian promoters of the country’s second largest scooter maker, D K Singhania, L K Singhania, Sanjiv Shriya and others, last week filed a suit at the Kanpur civil judge’s court for implementation of the JVA.

Terming theinterpretation of Singhanias to buy them out this way as "erroneous", Piaggio’s India representative, Mario Emprin said the Italian firm "will oppose such interpretation of the JVA in all the necessary forums in order to safeguard its position".

Earlier this month, Singhanias had written to Piaggio asking for the 23.6 per cent shares stating it was merely exercising its rights as per the JVA. After Piaggio’s replied stating that this interpretation was erroneous, the Indian partner decide to move court, the sources said.

Meanwhile, it is learnt that the Singhanias of LML have offered to buy out Piaggio’s stake in the company at Rs 18 per share which is the average book value of the company’s share for the past three years.