Harsh Vardhan Lodha has retained control over Birla Corporation Ltd by an ‘overwhelming majority’ at Wednesday's annual general meeting.

But the warring Birla and Lodha camps traded charges of fraudulent and illegal voting that threatens to erupt into another confrontation in the 17-year-old legal battle for control of the M.P. Birla Group.

The five resolutions moved by the Lodha-led management, which included the appointment of CEO and MD Arvind Pathak, received support from 99 per cent of the valid votes. One resolution pertaining to the appointment of retired justice D.G. Karnik was passed with the requisite majority.

A resolution seeking to appoint Rameshwar Singh Thakur that was proposed by The Punjab Produce and Trading Company Pvt Ltd, a promoter group company which is not under Lodha’s control, was defeated with 70.03 per cent of the votes cast against it.

The poll scrutiniser’s report showed that votes relating to over 1.06 crore shares were termed invalid on technical grounds. These shares belong to three entities: Hindustan Medical Institution, Eastern India Educational Institution and Belle Vue Clinic, which together hold a 13.89 per cent stake.

Armed with an opinion obtained from a retired judge of the Calcutta High Court, the scrutiniser also rejected a set of votes cast on behalf of three investment companies, Augusta Agents Ltd, Insilco Agents Ltd and Lanseda Agents Ltd, who cumulatively hold 23.4 per cent.

But another set of votes cast on behalf of these companies were approved with the approval of the depositary, NSDL.

The Lodha camp said the invalid votes would not materially change the outcome of the poll. However, the Birla camp contested the claim saying Karnik would have lost and Thakur would have been admitted to the board.

False voting

The Lodha camp sources said people who were not legally authorised to vote on behalf of these trusts and investment companies had done so at the AGM. They claimed that these frauds were detected in time.

“These impostors are now liable to face prosecution for cyber trespassing, theft and misappropriation of property. It is clear that these crimes were committed by rogue elements who stoop to new lows every year ahead of Birla Corp’s AGM,” said Debanjan Mandal, partner, Fox & Mandal, and counsel for Lodha.

Birla rebuttal

E-voting by valid and authorised people on behalf of three companies was wrongfully rejected while votes cast by Lodha nominees in favour of Karnik’s appointment were treated as valid, said N. G. Khaitan, senior partner, Khaitan and Co, and counsel for the Birlas.

“If this hadn’t happened, Justice (retired) Karnik’s appointment would be defeated with 72 per cent of the vote going against it while the resolution to appoint Thakur would have been carried with 70 per cent of the votes in favour,” Khaitan said.

The Punjab Produce & Trading Co later said it was exploring its legal options and may also file criminal suits if advised to do so.