Vikram Bakshi's attention divided, not to extend term as MD: McDonald's tells CLB

By Shubham Batra

NEW DELHI: US burger chain McDonald's has told the Company Law Board that it decided not to extend Vikram Bakshi's term as the managing director of one of its joint ventures in India because he has not been devoting enough time for the business. Bakshi has not been able to devote substantial time in the development and performance of the business due to his association with 25 other companies promoted by him and his family, McDonald's India said before the Company Law Board (CLB) on Thursday.
Bakshi had approached the board after McDonald's removed him as the managing director of Connaught Plaza Restaurants, the joint venture that runs McDonald's outlets in north and east India, on August 6.

McDonald's in India had signed a 25-year joint venture agreement with both Bakshi and Amit Jatia, its partner for west and south India, which would run till 2020. This changed in May 2010 when McDonald's decided to sell off its shares in the Jatia venture in favour of its Indian partner.

McDonald's had earlier also alleged that Bakshi committed breach of agreement by pledging his shares of Connaught Plaza Restaurants with financial institutions to raise funds for his other hospitality businesses.

Refuting all the charges levelled against him, Bakshi has said that the McDonald's has adopted "double standards" while dealing with its two partners in the country.

In a rejoinder filed with the Company Law Board, Bakshi has argued that his counterpart in the West and South region, Jatia, is a director of 23 companies, including Fame India, Inox Leisure and Sterling Resorts, a person privy to the matter told ET. Hence, "MIPL's allegation that Bakshi has purported conflicting business interests is misplaced and misconceived", the person said.

Bakshi has pointed out that West Pioneer Properties (WPPL), in which Jatia is executive chairman, operates a mall in Mumbai with more than 20 restaurants, including Kentucky Fried Chicken ( KFC), which is the biggest competitor of McDonald's in India and globally.

Bakshi argued that this shows the double standards maintained by McDonald's in handling its two similar joint venture agreements.

On the US firm's allegation of Bakshi pledging the joint venture's shares, he has argued that there are documents to show that the transaction was consummated with the said bank and he is in possession of the original certificates of shares, the source said.

Bakshi, in latest affidavit, has also highlighted that while McDonald's charged CPRL high royalties for using the brand name and for serving food and beverages of the US giant, it never gave CPRL royalty for selling India-developed products includingi McAloo Tikki and Pizza McPuff in the Middle East and South East Asia.