Birla Corp slips 9% after HC bars Harsh Lodha from MP Birla group companies

 Shares of Birla Corporation (Birla Corp) dipped 9 per cent to Rs 662 on the BSE in the intra-day trade on Monday after the Calcutta High Court (HC) on Friday restrained Harsh Vardhan Lodha from holding any office in M P Birla group entities. The stock of cement & cement products company recorded its sharpest intra-day fall since March 23, 2020, when it had tanked 20 per cent on the BSE.

“A Single Bench of the Hon’ble High Court at Calcutta vide its order dated 18th September, 2020 in a probate proceeding to which the Company is not a party has, inter-alia, restrained Shri Harsh V. Lodha, Non-Executive Director and Chairman of the Company from holding any office in our Company,” Birla Corporation said in an exchange filing.

The company is in the process of reviewing the said order of the Hon’ble High Court. Further material development, if any, in the matter will be intimated to the Exchanges, it said.

According to a Business Standard report, the order said, "Harsh Vardhan Lodha is restrained from holding any office in any of the entities of M P Birla Group during pendency of the suit (testamentary). "The court also directed implementation of the decision of the committee of administrators.

These directions mean that Harsh Vardhan Lodha immediately ceases to hold all positions in the M P Birla group, including as director in the firms and other positions in the trusts and societies of the M P Birla group, a statement from the Birlas read. CLICK HERE TO READ FULL REPORT

Meanwhile, the stock of Birla Corp outperformed the market and rallied 93 per cent from its recent low level of Rs 374 on May 7, to Rs 721 on Friday. In comparison, the S&P BSE Sensex has gained 23.5 per cent during the same period.

The management said that faced with unprecedented uncertainties, the company has undertaken several measures to rationalise costs and improve efficiencies across the board. To shore up profitability, a special drive has been undertaken to aggressively reduce fixed costs and optimise transportation and distribution costs, including the cost of transporting fly ash by rail. These are being done in addition to reduction in power cost through higher generation of solar power and other optimisation measures as well as a change in product mix at certain plants, it said while announcing June quarter results on August 7.

At 12:11 pm, the stock was trading 5 per cent lower at Rs 684 on the BSE, against a marginal 0.02 per cent rise in the S&P BSE Sensex. A combined 335,000 equity shares had changed hands on the counter on the NSE and BSE till the time of writing of this report.

High-powered jury to select BS annual award winners for year 2019 today

A power-packed jury comprising leading decision-makers of India Inc will meet in Mumbai on Thursday to select the winners of Business Standard’s annual awards for corporate excellence for 2019.
Aditya BirlaGroup Chairman Kumar Mangalam Birla is the chairman of the eight-member jury. The other jury members are JSW Group Chairman Sajjan Jindal, KKR India CEO Sanjay Nayar, EY India Chairman Rajiv Memani, Omidyar Network India MD Roopa Kudva, McKinsey & Company Senior Partner Noshir Kaka, Cyril Amarchand Mangaldas Managing Partner Cyril Shroff, and Bain Capital Private Equity MD Amit Chandra.

The jury will select the best in Corporate India, from a long list of names and data compiled by Business Standard Research Bureau, to name the “CEO of the Year” as well as achievers in other categories — public sector undertakings, multinational firms, and small and medium enterprises.
The jury will also choose the “Company of the Year” and “Start-up of the Year”, as well as announce the “Lifetime Achievement” awards.
The jury consists of the who’s who of India Inc. Besides running the diversified group, which ranges from cement to finance, Birla is known to be an astute industrialist who has taken the group to greater heights following a combination of organic and inorganic growth strategy. Jindal bet on the future of the Indian steel industry and made JSW Steel the number one player with a capacity of 18 million tonnes per annum, for which he was awarded Business Standard CEO of the Year in 2017. Noshir Kaka led McKinsey India as its managing director from 2011 to 2016, and founded the firm’s global outsourcing and offshoring practice and the business technology office in India. He is now the co-lead of McKinsey’s analytics practice globally. Memani joined EY in the mid-1980s and rose to become its India chairman and a member of EY’s global executive board and chairman of EY’s global emerging markets committee.
As CEO of KKR India since 2009, Nayar has been involved in several marquee private equity deals in the country. Prior to KKR, he headed Citibank India. Kudva, former CEO of Crisil, is on the boards of several marquee Indian companies and IIM Ahmedabad. Shroff, managing partner of Mumbai-based Cyril Amarchand Mangaldas, has a vantage view of Indian companies as a top lawyer. Chandra founded Bain Capital Private Equity’s India office in 2008 and was managing director, DSP Merrill Lynch, prior to that.

B K Birla, Karmayogi industrialist who lived a Gandhian life

Basant Kumar Birla who transformed a cotton and textile group into a diversified business empire breathed his last in Mumbai on Wednesday. He was 98.
The youngest son of the legendary Ghanshyam Das Birla, father of Aditya Vikram Birla and grandfather of Kumar Mangalam Birla, Basant Kumar is survived by his daughters Manjushree Khaitan and Jayashree Mohta.
Known as a perfect gentleman in industry circles, Basant Kumar was mourned by many.
West Bengal Chief Minister Mamata Banerjee tweeted, "Saddened at the passing of noted industrialist Basant Kumar Birla Ji. His contribution to education, through various trusts and institutions, is paramount. My condolences to his family, colleagues and friends."
Industrialist Harsh Goenka tweeted: B K Birla was a statesman of the business community, a visionary entrepreneur, a philanthropist, an educationist, a karmayogi for whom work was worship. He lived a Gandhian life leaving behind a fantastic legacy.
Sanjiv Goenka said, "B K Birla was a doyen. He led transformational thoughts in Indian industry. The Goenka family and the Birla family have cherished very close relationships over decades and generations and to all of us in the family, it's a huge loss."
Basant Kumar got involved with the family business at 16. At 25, father, Ghanshyam Das handed over the reins of Kesoram Cotton Mills. Degrees were for employment and Basant Kumar, though he had joined Presidency College, never completed the course as East came calling.
Elder brother L N Birla was travelling to Burma and other countries, and wanted Basant Kumar to join. But Birla had his exams in two weeks. The dilemma was finally settled when father Ghanshyam Das asked him, whether he wanted to be a clerk. It was the second time that someone from the Birla family was travelling abroad.
Diversification was in his DNA and Basant Kumar grew the group into a diversified empire across cement, tea, textiles, tyre sectors. From a cotton textile mill under Kesoram Cotton Mills, business interest expanded into rayon followed by cement and tyre. Ghanshyam Das too had diversified from the ancestral pawn business into manufacturing and set up a jute mill in Bengal and bought an old cotton mill in Delhi.
Century Textiles and Industries was a shining example of a successful diversification by Basant Kumar. From a single textile entity, under Century Spinning & Manufacturing Company, it was transformed into a powerhouse with interest in cement, pulp and paper and real estate.
In 1987, to reflect different industrial activities of the company, it was renamed Century Textiles and Industries, that today has revenues of around Rs 4,000 crore and a profit of Rs 681 crore.
Basant Kumar also weathered the transition from the days of the licence raj and permits to liberalisation. He had once said that the pre-liberalisation days were tough as corruption had set in after the first couple of years since independence and it was only once everything was de-controlled that companies started expanding.
But even as Basant Kumar expanded his companies, his was a cautious and meticulous approach. And till his health supported him, Basant Kumar would make it to office by 8:45 in the morning every single day. That hadn't changed till about four years back even when all he wanted was to focus on his hobbies, the Birla Academy and the Sangeet Kala Mandir.

Birla flags liquidity, spectrum payment issue at meet with telecom minister

Kumar Mangalam Birla, Chairman of Vodafone Idea Ltd, has flagged concerns about severe liquidity crunch in the telecom sector and high spectrum payments at a recent meeting with Telecom Minister Manoj Sinha, an official said.
Telecom sector has been battered by falling tariffs, eroding profitability, and mounting debt, in the face of stiff competition triggered by disruptive offerings of Reliance Jio, owned by richest Indian Mukesh Ambani.
Birla, who heads Vodafone Idea -- the country's largest mobile operator, raised the issues during a meeting with Sinha, which was also attended by Telecom Secretary Aruna Sundararajan.
A senior telecom Ministry official who did not wish to be named said that the meeting took place recently where Birla talked about the severe liquidity crunch in the market, and underscored the need for relief.
The talks were informal and the Department of Telecom will take a view on the issue once a formal representation is made, the official told PTI.
Vodafone Idea Ltd declined to comment on an e-mail query sent to the company on the issue.
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The Vodafone Idea Chief is said to have expressed concern over Rs 300 billion that is locked up on account of GST payment under 'reverse charge mechanism'.
Under the GST 'reverse charge mechanism' provision, registered dealers are required to make tax payments in case he procures goods from unregistered businesses.
The provision was applicable from July 1, 2017, till October 12, 2017. With companies facing trouble in implementing the provision, the GST Council has decided to keep RCM in abeyance till September 30, 2019.
Amongst other concerns highlighted by Birla was the high upfront payment for radiowaves, the official said, adding that he has sought that period of payment for spectrum purchases be increased to 18 years from the current 16 years, and favoured a moratorium.
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High levies in the telecom sector and the recent hike in import duty also figured in the talks, said the official but did not elaborate.
A bruising tariff war sparked by the entry of Reliance Jio into the telecom sector with free voice calls and SMS, bundled with cheap data has led to pressure on margins of incumbents which have scrambled to match competition.
Earlier this month, at its maiden earnings announcement as a joint entity, Vodafone Idea Ltd reported a consolidated loss of Rs 49.73 billion for the September quarter and announced a fund infusion of Rs 250 billion to help it take on brutal competition.
ALSO READ: Telecom industry feeling heat of duty hike, import costs to rise 10%: COAI
Bharti Airtel, too, has reported a drop in consolidated net profit for the 10th straight quarter as losses on mainstay India business widened due to pricing pressure from aggressive competition. Overall, its consolidated net profit of Rs 1.188 billion in July-September represented a drop of about 65 per cent from Rs 3.43 billion in the year-ago period.
Airtel's loss from India operations (before exceptional items) mounted to Rs 16.464 billion in the second quarter of the current fiscal compared to about Rs 9.4 billion in the preceding three-month period.
In fact, Moody's Investors Service recently placed Bharti Airtel's rating on review for downgrade, following low levels of profitability and expectation of weak cash flow.