Rajashree Birla will continue on the board of Pilani Investment and Industries Corporation Ltd as a director after two investment firms under the control of Harsh Vardhan Lodha abstained from voting today on a special resolution seeking to give effect to her appointment at the annual general meeting.

The special resolution, which must be carried by a three-fourths majority of the members present and voting, became necessary as Rajashree Birla turns 75 on September 15. The Sebi listing rules mandate that shareholders must pass a special resolution for the reappointment of all directors above 75.

Rajashree Birla is the mother of Aditya Birla Group chairman Kumar Mangalam Birla.

Pilani Investment and Industries Corporation is a premier Birla family investment company set up by patriarch Ghanashyam Das Birla in 1948.

The scrutiniser of the voting at the AGM has yet to issue his report and the results will likely come in the next few days.

However, sources confirmed that entities belonging to the erstwhile MP Birla group -- and now controlled by Harsh Vardhan Lodha -- chose to abstain from voting.

The Lodhas, who have been locked in a spate of cases with the Birlas, hold around 25 per cent in Pilani. Their decision to abstain will pave the way for Rajashree Birla to be reinstated on the board.

The Birla family entities as promoters of Pilani Investment hold a 57.55 per cent stake and would have required active or tacit support of the public shareholders, including the Lodha-controlled firms, to carry any special resolution.

The Birla family and the Lodhas are enmeshed in bitter legal disputes ever since Late Priyamvada Devi Birla bequeathed the reign of M.P. Birla empire to Rajendra Singh Lodha, Harsh’s father, in 2004 by a will.

Angered at the turn of events that an ‘outsider’ would gain control of a slice of Birla family empire, the purported will was challenged by the family, led by Basant Kumar Birla, grandfather of Kumar Mangalam.

More than 100 cases have been filed by either side since then. Both B.K. Birla and R.S. Lodha passed away in 2019 and 2008 respectively.

The Lodhas' decision to abstain from voting at the Pilani AGM comes at a time when a single judge is hearing the probate of the will sought by Lodha even as the Birla camp has renewed its efforts to dislodge Harsh Lodha from the M.P. Birla group companies.

Harsh Lodha sits on the board of all the operating companies of M.P. Birla and acts as their chairman.

“Lodha would not have gained control of Pilani by blocking Rajashree on the board and, hence, may have decided not to vote,” said a source. Lodha did not respond to text messages or phone calls.

Unsurprisingly, Birla camp had a different take. “If a company (Pilani) is doing well and the investment is safe and giving return, why rock the boat?” they argued to explain Lodha's decision.

Flip-flop move

The reappointment of Rajashree Birla had some dramatic moments in the lead up to the AGM. On September 5, she informed the board that she would not be seeking re-appointment without assigning any reason.

This sparked a piquant prospect where for the first time in 70 years, there might be no one from the Birla clan on the board of the investment company which has stakes in several top Birla companies including Century Textiles, Kesoram, Hindalco, and Ultratech.

The company then informed the bourses of the withdrawal of the resolutions pertaining to her appointment.

Two days later on September 7, the company again informed the bourses that she had agreed to stay on at the request of the rest of the directors and the special resolution relating to her appointment was back on the table for a vote.

Rich legacy

The investment company, founded by GD Birla, bears the name of the village from Birla family hails in Rajasthan. Before it was relocated to Calcutta, Pilani was headquartered in Gwalior, a princely state before independence, which attracted many companies due to the benign tax system and easy compliance.

Three factions of the Birla family — Ghanshyam Das and his two brothers — had equal shares in them. While the share of M.P. Birla is now under control of Lodha, the rest is now consolidated and owned by Kumar Birla and his grandfather's estate.