Financial Daily from THE HINDU group of publications
Wednesday, Jan 01, 2003
Financial Daily from THE HINDU group of publications Wednesday, Jan 01, 2003 |
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Corporate
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Courts/Legal Issues Markets - Consumer Activism UB move to buy Mallya's US assets suffers setback Boby Kurian
BANGALORE, Dec. 31 THE UB group's decision to buy the personal brewery assets in the US of its Chairman, Mr Vijay Mallya, suffered a fresh setback with the Karnataka High Court rejecting a plea which sought a stay on a trial court order restraining the transaction valued at $13 million. The High Court upheld the trial court injunction while disposing of an appeal filed by the Kingfisher Properties & Holdings Ltd, a UB group company. The Bangalore City Civil Court through an interim order on November 25 restrained the company from effecting the buyout following a suit filed by an aggrieved shareholder, Mr Amarendra Kumar Dey. A single judge Bench of the High Court has directed the trial court to take up the hearing of the matter expeditiously. It also asked the parties concerned to appear before the trial court on January 1, 2003, for filing of statement and objections. KPHL had received shareholders' nod at the annual general meeting held on September 30, 2002, to utilise $13 million for purchasing up to 100 per cent shares of Mendocino Brewing Company, a Nasdaq-listed entity. The aggrieved shareholder claimed that the consent was obtained through "trick and subterfuge" as significant material information was not disclosed. The plaintiff has alleged that "more than 80 per cent of the money remitted outside India by KPHL for purchase of Mendocino shares will go to Mr Mallya" and will be used for liquidating his personal commitments abroad. Claiming that Mendocino's current market value was only $3 million, the suit added that the company had suffered loss in the last two years and was carrying an accumulated loss of more than $6 million.
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