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.
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.
Source: Business Standard