The Hindu Business Line : Electrolux Kelvinator faces another litigation

Close on the heels of successfully sorting out the hiccups on the proposed rights issue, the company is now facing litigation in the Delhi High Court with the original Indian promoters of the company knocking the doors of the court seeking clarifications on implementation of the merger scheme.

Mr Harish Kumar and Associates, the Indian promoters of the company, filed a petition on May 27 making various allegations against EKL and its majority stakeholders and foreign promoter AB Electrolux. They requested that the Court call for a report on working of the scheme of amalgamation by which Electrolux India Ltd and Intron Ltd merged into EKL.

The petitioners also requested the Court to give appropriate directions restraining the company from disposing of or alienating or encumbering or creating any third party rights, in respect of any of its assets, or in any manner altering the capital structure of the company. The petition came up for hearing on May 29. It has been adjourned till July 14, without any interim orders.

The Government had recently cleared the proposal of AB Electrolux to hike its stake to 100 per cent in its Indian joint venture, EKL, by acquiring shares through open offer and subscribing to the unsubscribed portion of the rights issue. The foreign parent controls 75.96 per cent of the company's equity, while the Indian promoters hold 9.64 per cent with the balance 14.40 per cent being held by the public and financial institutions.

Meanwhile, the Allwyn Electrolux Officers Association has filed a petition in the Andhra Pradesh High Court against EKL seeking directions to the company to pay voluntary retirement benefits to them at par with workmen. The petition will come up for hearing on June 9.

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Electrolux Kelvinator faces another litigation