New Delhi: The Supreme Court today stayed
proceedings by a local court in Kanpur on a petition by the
Lohia Group for buying the stake of its machinery joint
venture Austrian partner Starlinger at a disputed valuation.
The Lohia Group had sought to acquire Starlinger`s 40 per
cent stake in the joint venture -- Lohia Starlinger -- at a
price considered lower than the market value by the Austrian
firm.
Questioning the proceedings in the Kanpur court,
Starlinger had moved the Supreme Court seeking an injunction
and direction for referring the issue to an arbitrator.
The Supreme Court bench comprising Justice Altamas Kabir
and Justice A K Patnaik also issued a notice to R K Lohia of
Kanpur-based Lohia Group, directing him to file a reply.
During the proceedings, senior advocate Dushyant Dave,
appearing for the Austrian firm, submitted that as per their
SHA in Lohia Starlinger, both the promoters were not to sell
their shares to outsiders in case either wanted to exit.
Starlinger is a global leader in the field of machinery
and process technology for woven plastic sack production. In
1992, it had formed a JV with the Lohia family, named Lohia
Starlinger.
Later, the Austrian firm wanted to sell its 17,60,000
shares in the JV and referred the matter to KPMG for price
determination. However, KPMG fixed a negative price, much
below the market value, which was the bone of contention
between the two partners.
Lohia, stressing on the SHA, appointed one of their group
firms, Shruti Finsec Private Limited, to buy Starlinger`s 40
per cent stake in the JV at the share price fixed by KPMG.
However, this was opposed by the Austrian firm, which wanted
to negotiate the price.
Later, the Lohia family filed a suit in the Kanpur
sessions court, requesting a direction to the Austrian company
to sell its shares to Shruti Finsec.
According to them, as per the agreement, Starlinger could
not sell its 40 per cent stake to outsiders and the Austrian
firm would have to transfer shares to the Lohia Group nominee
at the price fixed by KPMG.
However, this was opposed by the Austrian firm, which
filed an application before the sessions court for referring
the matter for arbitration, which was rejected.
Subsequently, Starlinger approached the Allahabad High
Court, which June 6, 2010, also on rejected its plea,
observing that the Austrian firm had already approached the
Company Law Board seeking a similar relief and can not use two
forums at one time.
PTI
