We have often heard about big shot industrialists passing on wealth and estates to NGOs, welfare foundations and to educational and medical institutions. But ever heard of an industrialist assigning her assets to her chartered accountant?
Well, this unusual thing has happened in M P Birla Group, when Priyamvada Birla bequeathed her Rs 5,000 crore assets to chartered accountant Rajendra Singh Lodha through her ‘will’.
Priyamvada Birla, wife of late MP Birla, who took the onus of the group for nearly 14 years died in 2004. She allegedly had transferred all her assets to her Kolkata based Chartered accountant and a trusted friend RS Lodha in her ‘will of 1999’. The ‘will’ assigned complete control of MP Birla group and it’s varied industries, in the hands of Lodha.
Soon after her death, the various members of the Birla family tree which includes- Krishna Kumar, Basant Kumar, Kumar Mangalam and Yashovardhan Birla- unitedly decided to challenge the authenticity of the will. The Birla dynasty, claims that MP Birla and Priyamvada Birla had a mutual will, according to which a major bulk of their estate would be transferred to 3 trusts- Hindustan Medical Institution, Eastern India Educational Institution and the M.P. Birla Foundation. Also claim that Lodha fraudulently dissolved the trusts in 1999 to gain control of M P Birla Group. A large number of cases were filed and Lodha became a frequent visitor at Kolkata High Court.
However, the big shock came when RS Lodha died of cardiac arrest in the year 2008 and the limelight came over Lodha’s younger son Harsh Vardhan Lodha. As per the ‘purported will of 1999’ the control would be transferred to Lodha itself. To this, a bunch of shareholders filed a petition in the Company Law Board (CLB) detaining Birla Group to elect HV Lodha as the new chairman. After a year, the CLB passed the judgement in favour of Lodha.
As the cut-throat battle of Birla-Lodha is still raging, the group has been growing from strength to strength. Under the leadership of the current chairman, HV Lodha the Birla Group has more than doubled its networth since 2004 to Rs 11,000 crore. The firstborn jute industry of the group, which was facing losses has turned into a profitable and diversifying unit.
The company has acquired 100% shares of Reliance Cement, a subsidiary of Reliance Infrastructure Limited (RIL). This escalated the company to the top of the business, giving way for expansion in premier brands and modern plants.
We still don’t know who will win this deep-rooted battle, but one thing’s for sure, for the outsiders (Lodha’s) to the Birla’s Dynasty the ‘will scenario’ changed the entire ballgame.