Birla-Lodha legal tussle for Birla Group assets set to get fresh twist

KOLKATA: The Birla-Lodha legal tussle for MP Birla Group assets may take another turn with Rameshwara Jute Mills, a Birla group firm, deciding to take fresh legal recourse against Birla Corporation at the Bankshall Court for alleged violation of memorandum of association(MoA) of the company.

Rameshwara Jute is a minority shareholder of Birla Corp, the MP Birla Group flagship. The officials of Rameswara Jute alleged that BCL has entered the business of money market operations in a big way and notching a trading volume of over Rs 100 crore. Rameshwara officials argued that the activity is neither permitted by the objects clause of the company’s MoA and nor the shareholders as required under the provision of the Companies Act.

“For this purpose, the company has even taken the membership of Clearing Corporation of India (CCIL) to deal on CBLO (Collaterised borrowing and lending operations) platform,” the officials added.

CBLO is an innovative product conceived by CCIL. Primarily, CBLO participants are NBFCs pension funds and provident funds. It has also been alleged that BCL has not mentioned about its associate membership with CCIL. When contacted, Debanjan Mondal, the partner of Fox & Mondal, the Lodha counsel said Birla Corp has no information about any criminal complaint by any shareholder.