New Delhi: Fast food major McDonald's today said it is exploring legal options after the NCLT restored its estranged partner Vikram Bakshi as the Managing Director of Connaught Plaza Restaurants Ltd (CPRL).
Besides, restoring Bakshi as the MD of CRPL, the National Company Law Tribunal (NCLT) has also restrained the Illinois-headquartered McDonald's Corporation, the parent company of McDonald's India Pvt Ltd (MIPL), from interfering in the functioning of the joint venture.
"We respect the decision of the NCLT. We are examining the judgement and exploring our legal options in the matter," said MIPL in an official statement.
Any order of NCLT could be challenged before the National Company Law Appellate Tribunal (NCLAT) within 45 days of the order.
CPRL, a 50:50 joint venture between McDonald's India Pvt Ltd (MIPL) and Bakshi, is the licensee for north and east India regions for the fast food chain.
Commenting on the development, Vikarm Bakshi told PTI: "Our stand has been vindicated and we have got justice after fighting for the right cause. I admire the Indian judiciary which has gone in every account and delivered a judgement on Indian entrepreneurship."
He further added that CRPL would now come back to its growth and operational journey the way it was prior to 2013 and continue to progress.
Bakshi was not re-elected as the MD of CRPL following the objections of MIPL and its parent company. McDonald's had on 30 August, 2013 announced that Bakshi's term as MD of CPRL had ended on 17 July following which Bakshi challenged the decision before CLB (the previous body having jurisdiction over company matters).
Consenting to his submissions that McDonald's wanted to oust him after the venture was established in India, the NCLT said: "It is with a view to grab hard labour of Mr Bakshi which has been invested in CPRL that had triggered the non- voting in his favour on the meeting dated 6 August, 2013."
"It is also an act against the interests of CRPL and detriment to public interest," it added.
The tribunal also rejected McDonald's submission that as per the clauses of the agreement between them, MIPL may exercise call option, virtually ousting Bakshi from CRPL.
"The position of Managing Director is linked with Mr Bakshi in such a manner that if he loses his status as MD, he may also lose his shareholding by virtue of provision of clauses 26 and 32 of JV agreement," said NCLT.
It further said the argument is "absurd and we reject the same."
In its 134 page order, the company law tribunal has also appointed former Supreme Court judge Justice G S Singhvi to act as administrator in the company with power to vote in the meeting of the board and restrained McDonald's Corporation from interfering into the company's affairs.
"Respondent No 5 (McDonald's Corp) is restrained from interfering with the smooth functioning of CPRL and all its 154 restaurants open in the assigned territory of North/East India," NCLT said.
Published Date: Jul 14, 2017 05:19 pm | Updated Date: Jul 14, 2017 05:19 pm