HC appoints administrators for MP Birla group

The court, however, did not name the administrators.

On a plea by the counsel of Lodha, Justice Sengupta granted a conditional stay on the operation of today’s order till three weeks from June 6 when the court would open for hearings.

Justice Sengupta also directed Lodha that during the interim period he should not act as the chairman or director of the M.P. Birla group on the strength of Priyamvada’s shareholding. However, he can act as a director of the company on the basis of his own shareholding.

The Birlas had filed the application seeking appointment of administrator on the ground that the huge property of the M.P. Birla group needed to be protected till the court decided on who should be the rightful heir to the group assets.

Lodha, a chartered accountant has been acting as the Chairman of M.P. Birla group and overseeing its entire operation after the death of Priyamvada, wife of Madhav Prasad Birla, in July 2004.

Lodha had claimed immediately after her death that the entire assets of M.P. Birla group amounting to Rs 5,000 crore had been willed away to him by Priyamvada by a purported will made in 1999.

The Birlas, however, challenged Lodha’s claim in the court contending that the estate of M.P. Birla was meant for charity.

Lodha’s move to seek probate for the purported will of Priyamvada before the Calcutta High Court was challenged by the Birla family who claimed that the chartered accountant had allegedly defrauded Priyamvada to make the purported will and also filed a criminal case against Lodha and three others.

Birlas had filed an application before the high court for appointment of an administrator for the M.P. Birla group in December, 2004 and after initial hearing Justice Sengupta had passed an interim order in March 2005 directing Lodha to maintain status quo in the estate of Priyamvada, but had refused to appoint an administrator at that juncture.

The court had also directed that controlling interest in the companies of M.P. Birla group, including flagship Birla Corporation, would not be changed or disposed off till final disposal of the matter.