AUGUST 15, 2004
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Attention Span
Telecom, civil aviation and insurance share this in common: they are all markets that have government-imposed entry barriers for varied reasons. This alters the dynamics of competition in these markets, and in different ways. But still, they must all hope for a customer with a long attention span.


Q&A: Jim Spohrer
One-time venture capital man and currently Director, Services Research, IBM Almaden Research Lab, Jim Spohrer is betting big on the future of 'services sciences'. And while at it, he's also busy working with anthropologists and other social scientists who look quite out of place in a company of geeks. So what exactly is the man—and IBM's lab—up to?

More Net Specials
Business Today,  August 1, 2004
 
 
LODHA Vs THE BIRLAS
A Battle Of Wills

The Story So Far: M.P. Birla Group Matriarch Priyamvada Birla dies, leaving a will that makes long-time confidant, R.S. Lodha (left), a chartered accountant, the main beneficiary and the executor. A shocked Birla clan closes ranks and launches a legal campaign to oust the outsider. Now, read on.

Camp Birla is preparing to launch an all-out attack to regain control of Fort M.P. Birla. And the defenders in Camp Lodha are not sitting idle.

The Birlas, who had filed a series of caveats in the Calcutta High Court to prevent R.S. Lodha from obtaining ex-parte probate of Priyamvada Birla's will, may actually end up repenting at leisure for what they'd done in haste. Fox & Mandal, the 108-year-old law firm representing Lodha, has challenged the locus standi of K.K. Birla to file a caveat. A lawyer explains that only persons who would have inherited the estate in the normal course-if there had been no will-can file caveats.

"They're just testing the waters," says an individual watching the happenings in Camp Lodha. "If the court sets aside K.K. Birla's caveat, they could try the same line of attack with the other caveators." Only the caveats filed by M.P. Birla's sisters, Laxmi Devi Newar and Radha Mohta, are on firm ground. The others, including the one filed by Yashovardhan Birla, would seem to be in a grey area legally.

OTHER COVER STORY
The Saga Of An Empire
How The Birlas Plan To Attack The Will
The Likely Scenarios
Where Does The M.P. Birla Foundation Stand?
What Is At Stake?
The Crown Jewel?
Birlas: A Magic That Failed

By challenging these caveats, Lodha hopes to kill two birds with one stone. Since the testamentary suit cannot proceed till the line-up of defendants is properly defined, he gains crucial time to consolidate his grip over Priyamvada Birla's estate (as executor of Birla's will, he will remain in command unless otherwise ordered by the court; and the court is unlikely to pass any orders while the locus standi of his opponents is under question). Secondly, he's hoping that by eliminating the Birla males from the line-up of his opponents, he can turn the proceedings into a straight fight between himself and M.P. Birla's sisters.

A bureaucrat, who worked closely with Lodha during his term as director of Oriental Insurance Company, says: "He's one of the smartest cookies in the pack. He knows exactly when to bow down, when to strike back, when to smile and when to glare. The Birlas have committed a blunder by allowing him an opening like this."

The Birlas, meanwhile, are also priming their gunpowder. They've retained a battery of heavyweight lawyers. Led by the redoubtable N.G. Khaitan of Khaitan & Co, Team Birla includes Ram Jethmalani, Fali Nariman, Arun Jaitley, K.K. Venugopal, Harish Salve, Kirit Rawal, Abhishek Singhvi and Siddharta Shankar Ray. Interestingly, several of them are known as much for their legal acumen as for their political standing.

LAWYERS' DAY OUT: N.G. Khaitan (left) represents the Birlas who have also hired heavyweights such as Fali Nariman and Harish Salve. Debanjan Mondal represents Lodha

Then, this is not just a legal battle. And the Birlas are clearly prepared to take the battle into the political arena. That much became apparent when they roped in the Swadeshi Jagran manch's S. Gurumurthy. K.K. Birla and his grand nephew Kumar Mangalam, are working their connections. The Birlas have already met Prime Minister Manmohan Singh, Finance Minister P. Chidambaram and Congress President Sonia Gandhi.

To return to the legal arena, Camp Birla has already fired a salvo across Lodha's bows. Two of the witnesses to the will have reportedly said Birla had not signed the document in their presence, that they affixed their signatures as witnesses on a signed will brought to them.

And finally, the family is expected to produce an old will signed by M.P. Birla himself in which he gives his wife a life interest in his estate and clearly expresses his desire to use his assets for charity. "He signed internal documents with the Sanskrit couplet Twadiyang vastu Govinda tubhyameva samarpaye (From God we receive, to God we offer). Isn't it natural for such a person to want to leave his estate for charity?" a person close to the family says. "And that is what the Birlas are determined to ensure."

HAPPIER DAYS: (Clockwise from left) M.P. and Priyamvada Birla; Priyamvada with a just-born Aditya Vikram Birla; Priyamvada with Nandini Nopany

The Birlas have time and again stated that this isn't about money. "The family is very upset over the breach of trust," says the same friend of the family. Still, questions remain over the management control of M.P. Birla group companies if the Birlas do manage to stop Lodha. Beyond a few vague statements Camp Birla hasn't said much.

The credibility of the plan would depend crucially on the identities of the family members who will be involved in running M.P. Birla's companies. It is no secret that some branches of the family aren't doing too well, and, so control of all or even part of the M.P. Birla group would come as a lifeline for them. Coincidentally, the branches which are closest to M.P. Birla in terms of bloodline are also the ones facing the most difficult times.

But we'll have the answers to these and several other questions only after the judicial review is over. That will take time. Already, one judge who was scheduled to hear the matter has recused himself from it as he had represented the Birlas during his career on the bar. Meanwhile, both sides will try to extract every ounce of advantage from even the most trivial of things.

 

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