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Priyamvada Birla bequeaths Rs 5,000 crore to CA
Kausik Datta in Mumbai |
July 14, 2004 08:46 IST
Last Updated: July 14, 2004 13:01 IST
The Birla family will contest Priyamvada Birla's will.
Krishna Kumar, Basant Kumar, Ganga Prasad, Sudershan Kumar, Kumar Mangalam and Yashovardhan Birla -- of different branches of the Birla family tree -- on Tuesday unitedly decided to challenge the legal status of Priyamvada Birla's will, which bequeaths the Rs 5,000 crore (Rs 50 billion) assets of the Madhav Prasad Birla group to chartered accountant R S Lodha.
The family has appointed two Kolkata-based solicitor firms, Khaitan & Co and NG Khaitan & Co, to draw the blueprint of legal recourse.
Priyamvada Birla's will was opened yesterday in Kolkata, 10 days after she passed away. Priyamvada was managing the show of the group for the past 14 years since Madhav Prasad, the nephew of the legendary Ghanshyamdas Birla, died.
Speaking to Business Standard from Kolkata, B K Birla said: "There is perfect harmony within the family. Unitedly, we will move court. The family members have examined the will and the consensus is that we have the moral and legal right to challenge the validity of the will. We are confident that we will win the case."
Lodha was not available for comment.
The Birlas held several rounds of meetings on Tuesday before arriving at the decision of moving the courts. However, no timeframe has been set for this.
Sources in the Birla family said the will, which was shown to them yesterday, vested R S Lodha with the power to interfere in the affairs of the Birla family and, therefore, should be contested.
They also refused to believe that Priyamvada could have left the will in the custody of the person who was its beneficiary.
By getting access to the M P Birla estate, Lodha will get a share in Pilani Investments, the holding company of the Birla group of companies.
Although the cross-holdings of various Birlas were cleared to a great extent when they were separated after the death of Ghanshyam Das Birla, Pilani Investments still has shareholding in many companies.
M P Birla had a 25 per cent stake in Pilani Investments while the holding of BK Birla and GP Birla is 30 per cent and 25 per cent, respectively.
The balance 20 per cent is held by the Krishna Kant and Sudershan Kumar families. The Birla clan is opposing the transfer of MP Birla's 25 per cent stake in Pilani Investments to Lodha.
Pilani Investments holds shares in Century Textiles, Kesoram Industries, Mangalam Cement, Mysore Cements, Grasim Industries, Hindalco, Indian Rayon, Jay Shree Tea, Mangalore Refinery, Orient Paper, Saurashtra Chemicals, Zuari Industries, Birla VXL, Bihar Caustic & Chemicals.
Since these companies hold shares in other Birla companies, Pilani Investments has indirect holding in virtually all the companies managed by the Birla group.
This essentially means that a stakeholder of Pilani Investments will have access to the affairs of the family.
"We would have no objection to the will had it only vested Priyamvada's personal investments as well as her own group's estates to anybody, barring her stake in Pilani Investments," said a Birla family member.
"On many occasions, Priyamvada had hinted that there would be a trust set up to look after the group. She had also indicated that Lodha would be the chairman of the trust. But she never hinted that she would bequeath all assets to Lodha, whom she had appointed three years ago as co-chairman of the group flagship, Birla Corporation," source added.
Family sources were shocked that Yashovardhan, the only surviving male heir in the Rameshwardas branch of the family, had been left out of the estate. Rameshwardas had two sons, Gajanan and MP Birla.
While the latter had no successors, Gajanan's son Ashok Vardhan died an untimely death in a plane crash, leaving Yashovardhan as the sole surviving successor in that family branch.
BS Kolkata bureau adds: Sources close to the Birlas said, "If the shares are held by an 'outsider', they could be sold to any faction for the highest price totally upsetting the status quo on the issue."
They said one possibility was that the Aditya Birla Group, which had huge resources, picked up these Pilani shares. This would give the group an advantage when the Birla interests are finally untangled.