Entrepreneurship is the hallmark of a corporate house’s success and consequently the nation. However, many a times this spirit has led to difference of opinion among the stakeholders. Here are a few corporate battles that took the whole nation in its stead at times crossing the limit of boardrooms…
The gas pricing and supply dispute between Reliance Industries Limited (RIL) and Reliance Natural Resources Limited (RNRL) was splashed in all major newspapers in India and abroad. RNRL was seeking 28 million cubic meter of gas a day from RIL’s eastern offshore KG-D6 fields at a fixed price as per family agreement (Memorandum of Understanding) in 2005 to split the Reliance business empire between the brothers. In June 2009, the Bombay High Court upheld the sanctity of the MoU whereby RIL would have to supply gas to RNRL’s proposed Dadri power plant at $2.34 per mmBtu i.e. 44 per cent lower than the Government set price. However, the Apex Court’s recent judgment put the high voltage corporate battle to rest. While turning down the Bombay High Court judgment, the Supreme Court observed that the Government has the sovereign right over the nation’s natural resources that also include natural gas. Thus, no private arrangement like the MoU drafted by the brothers on sharing of the gas from the D6 KG basin gas can override Government policy.
Priyamvada Devi Birla and her husband Madhav Prasad Birla, who were issueless, owned an industrial empire known as the MP Birla Group of Industries. They said to have executed mutual wills on identical terms in May, 1981 bequeathing their respective estate(s) to the ‘charities’ to be nominated by the executors. However, the said wills were revoked and another set of mutual wills were believed to be executed in July, 1982. It is believed that in April, 1999, Priyamvada Devi Birla executed her last will bequeathing her entire estate, valued at around Rs 3, 000 crore to Rs 5,000 crore, to Rajendra Singh Lodha, the MP Birla group’s auditor and also appointed him as the sole executor. After her demise in July 2004, the Birla family opposed the will and claimed that she could not have left her assets to an outsider. Various litigation cases are being fought between the Birlas and RS Lodha and after his death, his son, Harsh Vardhan Lodha. Though Harsh Vardhan Lodha has yet to secure probate of Priyamvada Birla’s will, he heads the group with the support of directors of holding companies that own controlling stakes in MP Birla group firms.
In 1991, Ratan Tata inherited a business group that was run by a confederation of ageing satraps including Russi Mody (Tata Steel), Darbari Seth (Tata Chemicals), Ajit Kerkar (Taj Group of Hotels) and Sumant Moolgaokar (Telco), under the benevolent JRD Tata. In a bid to wield tighter control over the group companies, Ratan Tata sent out letters to all the Tata group companies informing them about the resolution on the retirement age, which led to a showdown with the satraps. By winning the control of its flagship companies, Ratan Tata transformed the group.
In 1971, Neville Wadia decided to sell Bombay Dyeing to Kolkata based industrialist, RP Goenka and settle down in Switzerland. However, Nusli Wadia, his son did not like this proposition of his father and revolted. With the help of his mother Dina Wadia and mentor JRD Tata, Nusli garnered 11 per cent shares of the company. Moreover, he persuaded the employees to pool their savings and buy shares to prevent the sale. It is noteworthy that the agreement of sale between Wadia senior and Goenka had been penned down but never signed. Nusli’s perseverance and determination paid off and he retained the company. He succeeded his father as ‘Chairman’ of the company and took it to new heights.
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