Shares of Birla Corporation fell over 8 per cent in intraday trade on the Bombay Stock Exchange on Monday after the Calcutta High Court on Friday ordered removal of Harsh Vardhan Lodha from all positions in the Rs 25,000 crore MP Birla Group and its associated entities with immediate effect. Lodha, who is the chairman of MP Birla Group companies, has also been barred from drawing any benefit from the assets of Birla Estate.
Weighed down by Court order, Birla Corporation share declined as much as 8.16 per cent to hit a day's low of Rs 662.20 against previous closing price of Rs 721.10. The BSE Sensex was trading 369 points, or 0.95 per cent, lower at 38,475.95.
In a similar trend, share price of Birla Corporation touched an intraday low of Rs 661.05 after opening lower at Rs 699.70 on the National Stock Exchange (NSE). The stock was currently trading at Rs 678.85, down 5.58 per cent.
"A Single Bench of the High Court at Calcutta vide its order dated 18th September, 2020 in a probate proceeding to which the company is not a party has, inter-alia, restrained Harsh V. Lodha, Non-Executive Director and Chairman of the company from holding any office in our company," Birla Corporation said in a filing to the BSE.
The company further stated that it is in the process of reviewing the court order. The court order means that Lodha ceases to hold all positions in the MP Birla Group, including his role as director on the boards of MP Birla companies, listed entities Vindhya Telelinks Ltd, Birla Cables Ltd and Universal Cables Ltd.
Reacting to the news, shares of Universal Cables were down 6.04 per cent at Rs 136, followed by Vindhya Telelinks (Rs 830.25, 2.43 per cent) and Birla Cables (Rs 54.20, down 0.09 per cent).
Lodha has been locked in a 16-year-old legal battle over Priyamvada Birla's will to retain control of cement maker Birla Corporation. The court decision will provide respite to the extended Birla family which has contested the legal validity of Priyamvada Birla's will. In the will, Priyamvada Birla bestowed her estate and control of the (now) MP Birla empire to her chartered accountant R.S. Lodha and his second son Harsh Vardhan Lodha.
By Chitranjan Kumar