The settlement comes
a little over two years after Chhabrias death in April 2002
Mumbai, Aug. 9, 2004
Vijay Mallya has finally buried the hatchet with his old bete noire
the late Manu Chhabria. Mallyas United Breweries group
and Shaw Wallace, now run by Chhabrias wife Vidya and daughter
Komal Chhabria Wazir, have withdrawn a slew of cases they filed against
each other in different courts in India and a case in Hong Kong.
The settlement comes a little over two years after Chhabrias
death in April 2002. Manu Chhabria was a flamboyant corporate predator
who made his millions as a Dubai-based non-resident Indian before he
set his eyes on blue-chip Indian MNCs like Shaw Wallace and Dunlop
The truce between the two sides who control between them the
lions share in Indias spirits market brings down
the curtain on one of the most celebrated corporate dust-ups that began
in the mid-eighties when Mallya and Chhabria fell out after grabbing
control of Shaw Wallace.
Shaw Wallace today announced that all disputes between the UB group,
headed by Vijay Mallya, and Shaw Wallace, managed by the Jumbo group,
had been resolved. It signalled the end of a series of legal cases,
some of which date back to the 1980s.
Shaw Wallace chairperson Vidya Chhabria said: Shaw Wallace has
a singular agenda of continued leadership in the alcoholic beverage
industry. Disputes tend to distract from positive and constructive action.
This settlement will help us focus more sharply on our primary business
objective.
Mallya was not available for comment. A UB group spokesperson said:
We have no comment to offer. Clearly, Mallya is focused
on bigger issues nowadays, said an observer who has been tracking the
rivalry. Mallya is now focused on the aviation business and has already
announced plans to launch a carrier called Kingfisher Airlines.
The truce with Shaw Wallace does not, however, signal the end of the
battle that Mallya has been waging with Manus younger brother
Kishore Chhabria with whom he had joined hands after his breakup with
Manu. Mallya and Kishore have been trying to settle their dispute over
the ownership of Herbertsons, a Mallya group company in which Kishore
controls more shares than the UB group.
The most critical of the litigations between Mallya and the Manu Chhabria
family was a suit at a Hong Kong court filed by two Hong Kong-based
companies, Alexina Investments and Sovereign Nominees. Manu Chhabria,
Jumbo International Holdings, Keysberg and some other Hong Kong-based
companies associated with the Jumbo Group were the respondents. The
plaintiffs had claimed 50 per cent ownership in Carrasco, which was
the special purpose vehicle created to acquire shareholding in Shaw
Wallace in the mid-1980s. After over a decade of litigation, both sides
filed consent terms in the court on June 18 this year upon which the
court of first instance dismissed the case.
In India, the principal dispute between the two parties has been over
the shareholding acquired by McDowell & Co and UB Holdings in Shaw
Wallace in the mid-nineties and 2002. It was on the basis of this shareholding
that McDowell & Co had approached Bombay High Court in 2002 seeking
an injunction against the business restructuring at Shaw Wallace in
its bid to form a joint venture with SABMiller, the world's second-largest
brewer. McDowell & Co has since withdrawn its civil suit from Bombay
High Court. Moreover, both McDowell and UB Holdings have disposed of
there entire holding in Shaw Wallace.
In a reciprocal gesture, Shaw Wallace has also withdrawn its petition
to the Company Law Board and Calcutta High Court seeking to nullify
McDowell's share acquisition in Shaw Wallace.