Harsh Vardhan Lodha has been removed from several trusts and societies of the MP Birla group, escalating the battle for the control of the entities belonging to the Calcutta-based industrial house.

Lodha has opposed the move which has been orchestrated by a couple of trustees and has filed complaints before appropriate forums including Calcutta High Court. He has asserted that he remains a trustee of these societies.

In a retaliatory move, companies controlled by Lodha have removed two of the trustees who were on their boards, sparking fresh legal battles before the company law tribunal.

The trusts and societies are custodians of some of the venerable public institutions of Calcutta: Belle Vue Clinic, South Point School, and M.P. Birla Planetarium. They also hold close to 14 per cent in Birla Corporation (BCL), which has a market capitalisation of Rs 10,332 crore as on Wednesday.

The latest round in this battle has erupted just before the annual general meetings of several MP Birla group’s manufacturing companies including BCL, Vindhya Telelinks, Universal Cable and Birla Cables that are scheduled to be held over the next fortnight.

Trusts & Societies

There are several trusts and societies within the M.P. Birla Group which have been under the effective control of the Lodha family after Priyamvada Birla died in 2004 leaving behind a purported will that made Rajendra Singh Lodha, Harsh’s late father, the executioner and beneficiary of her estate.

Harsh and his wife Anamika are managing committee members of all the trusts and societies, notably Hindustan Medical Institution, Eastern India Educational Institution, Belle Vue Clinic, and South Point Foundation.

A complaint filed by Anamika Lodha, which has been reviewed by this newspaper, blamed two trustees — Sushil Kumar Daga and Krishna Damani — for conniving to remove Harsh from these trusts and societies.

The Lodha camp has strongly challenged his ouster. The rules of the trusts and societies are governed by trust deeds which provide, in this case, a trustee hold office for life. A trustee can only be removed if all other members agree to it unanimously, a source in the camp, said.

“Actions by such rogue executives who may have switched loyalties are mischievous; they amount to a breach of trust and they will be prosecuted criminally for their actions. These very employees have filed written affidavits over the last 15 years in which they have repeatedly noted that these trusts and societies are independent of any individual or individual estates,” the source added.

Sources from Birla camp said trustee members have acted on the ‘guidance’ received by the administrator pendente lite (APL) committee which was appointed by court to oversee the estate of Priyamvada. “The single bench had ordered that HVL should be removed from all entities of the MP Birla group. The entities include trusts and societies,” a source in Birla camp said.

The Lodha camp argued that the probate court has no jurisdiction over these trusts and societies. In his order of September 18 last year, the judge had made this observation multiple times, the source said.

The appeal court, by its order of October 1, 2020, has gone ahead to clarify that the restriction on Lodha will extend to those entities where he assumed office on the strength of the estate’s shareholding. Following that, Lodha was removed from the investment companies by the APL committee, which Lodha has contested.

Lodha’s response to his ouster from the trusts has been to remove Daga and Damani from the boards of the companies which together hold close to 24 per cent in BCL.