Financial Daily from THE HINDU group of publications
Sunday, Jun 26, 2005
Corporate - Corporate Disputes
`Lodha appointed Birla Corp Chairman'
Kolkata , June 25
A LITTLE less than a year after the demise of Priyamvada Birla, Mr Rajendra Singh Lodha has been appointed chairman of the Rs 1,360-crore Birla Corporation Ltd, the flagship company of the MP Birla Group.
The development came to light when the company faxed its annual result for the year 2004-05 to Business Line on Friday after the board of directors approved it. On behalf of the company, the results were signed by Mr Lodha, his designation being given as Chairman.
Sources said the board of directors unanimously appointed Mr Lodha as Chairman. Earlier, even when Priyamvada Birla was alive, the results used to be signed by the Managing Director, Mr K.C. Mittal. Several attempts were made to contact Mr Mittal but he was not available.
However, the company did not issue any notice to the BSE or any other stock exchange about this development though such intimation was made on two earlier occasions when there was a change in the company's board of directors.
On April 5, 2005, it was stated that Mr Ajay Saraf, an ICICI nominee, ceased to be a director as the Birla Corporation had paid off a loan. Similarly, on April 8, it was posted that Mr D Bhandari of UTI ceased to be a company director. Both these changes were intimated to the BSE.
Prior to the death of Priyamvada Birla, Mr Lodha was co-chairman of the company. He continued to occupy that position and the board preferred not to elevate him to the Chairman's post.
However, attention was directed towards Mr Lodha's directorship in September last year, when a group of minority shareholders went to the Company Law Board on the issue. In March 2005, the CLB cleared his name of all charges.
Sources said that Mr Lodha could have become the Chairman of the company in April itself but it was delayed because there was no board meeting. The first meeting after the CLB order was held on Friday.
Legal counsel of Mr Lodha and the Birlas appeared to be unaware of this development. Even senior officials of the Birla group were in the dark when told about Mr Lodha's elevation.
Meanwhile, for the year ended March 31, 2005, Birla Corporation registered its highest ever turnover of Rs 1,343 crore. Its profit after tax was Rs 87 crore and a dividend of 15 per cent was declared.
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