Fiat India, Premier continue to cross swords for Doshi’s stake

In fact, PAL’s latest annual report adds that the company had filed a petition with CLB and the matter had partly been heard. During the course of the hearing, both PAL and Fiat have initiated discussions to settle all pending issues including inter-company transactions and sale of shares held by PAL in Fiat, the report adds.

However, Fiat India flatly denies this and is sticking to what the arbitrators would decide. The company said, “These shares are the subject matter of escrow agreement between the parties and in the event Fiat’s claims awarded by the arbitrators are more than the face value (Rs 32 crore) of the shares, PAL is obliged to transfer it to Fiat at no value.”

However, PAL, when asked whether they would receive any consideration for selling these shares to Fiat Auto said, “Of course. Once the price is agreed on the sale of the shares by Premier to Fiat Auto, Premier would receive the consideration.” PAL initially had 49 per cent in Fiat India, which subsequently came down to 2.55 per cent following the infusion of additional capital of Rs 1,200 crore by Fiat Italy. As per the agreement between Fiat Auto and PAL, shares held in Fiat India by PAL were kept in escrow for completing certain formalities like registration of conveyance deed to complete the transfer of Kurla business.

PAL claims that having completed the terms of the escrow, it requested the escrow holder to release the shares. Fiat raised certain commercial issues for which the escrow was agreed upon and requested the escrow holder to continue holding the shares in escrow which the company is disputing, the report adds.

PAL also claims that there were certain disputes with regards to the rights of the company as shareholder of Fiat India and hence it had filed a petition before the CLB.