The Hindu : Business : Lodha gears to take on Birla family challenge

Online edition of India's National Newspaper
Thursday, Jul 15, 2004

Business

Business

Lodha gears to take on Birla family challenge

By Malabika Bhattacharya

KOLKATA, JULY 14. R. S. Lodha, the co-chairman of M. P. Birla group, today filed a caveat in all courts within the jurisdiction of Kolkata in anticipation of a legal challenge which the Birla family is expected to throw on the issue of the will which the late Priyamvada Birla, the widow of M. P. Birla, drew up by which all her business assets and interests have been bequeathed to Mr. Lodha.

Mr. Lodha has inherited industrial assets worth more than Rs. 5,000 crores through the will of Priyamvada Birla, the owner of the group who died on July 3. Mr. Lodha was close to the clan for over the last two decades and was appointed co-chairman of the group about five years ago.

A brief will left behind by the 77-year-old Priyamvada Birla appears to have triggered unprecedented convulsion in the various branches of the Birla family, owner of many highly successful and pioneering businesses in India. The Birla family sources said Priyamvada's will came as a complete surprise as even those who were considered close to her have not been given anything. K. K. Birla's two daughters, Nandini Nopany and Jyotsna Poddar, who were very close to Priyamvada, have been totally ignored in the will. Her brother, Kashinath Taparia, also does not find any mention.

Beginning Tuesday evening when the will of Priyamvada Birla was ceremonially read out, India Inc.'s attention got rivetted on the Birla family — all its branch heads are in Kolkata — because for the first time in the history of family-run businesses in India, an empire estimated at Rs. 5,000 crores had been bequeathed to an outsider overriding the natural claims of a scion.

On Tuesday, R. S. Lodha, a leading chartered accountant and co-chairman of the M. P. Birla Group, became one of the richest men in the country by virtue of the will in which Priyamvada Birla bequeathed all her properties — nearly two dozen companies, many of them blue chip, dealing in cables, optic fibre, chemicals, finance, healthcare, education, entertainment — to him.

Mr. Lodha who is also the executor of the will — according to knowledgeable sources it is a four-line affair — read out the will in the presence of family elders like B. K. Birla, K. K. Birla, C. K. Birla, S. K. Birla and Yashovardhan.

"Our entire family is in this to fight out the case in court. And we hope to win the case," Mr. B. K. Birla is reported to have commented when contacted by newspapers on Tuesday evening. According to sources in the Birla family, one of the grounds on which the will can be challenged is that it was drawn up when she was `unsound of mind'.

Predictably, several theories are doing the rounds in the corporate circles here with regard to the will. One such suggests that Priyamvada Birla perhaps feared that family members would merge the M. P. Birla companies into their own. Today, the Birla Building in the central business district — which houses the offices of most of the Birla group companies — hummed with activity as the senior Birlas got together for a second round of strategy discussions. Basant Kumar Birla, grandfather of Kumarmangalam Birla, said almost the entire Birla family sat together and decided to challenge the will. The family's legal firms have already been directed to take necessary action, he added.

The M. P. Birla empire consists of: Birla Corporation Ltd., Universal Cables Ltd., Vindhya Telelinks Ltd., Birla Ericsson Optical Ltd., Optic Fibre Goa Ltd., Hindustan Gum and Chemicals Ltd., Birla DLW, Birla Financial Corporation, The Indian Smelting & Refining Co Ltd., Bombay Hospital & Medical Research Centre., Belle Vue Clinic., MP Birla Eye Foundation., South Point School, Kolkata, MP Birla Fundation of Higher Secondary School, Kolkata, Industrial Training Institute, Rewa Schools in Birlapur/ Satna/Chittorgarh and Allahabad, MP Birla Planetarium, Kolkata, and Agriculture & Horticulture Institute, Kolkata.

Printer friendly page
Send this article to Friends by E-Mail

Business