New Delhi: The National Company Law Tribunal (NCLT) on Thursday reinstated Vikram Bakshi as managing director of Connaught Plaza Restaurants Pvt. Ltd, an equal joint venture between Bakshi and McDonald’s Corp.
Connaught Plaza runs the McDonald’s franchise in North and East India. McDonald’s India had on 30 August 2013 announced that Bakshi’s term as managing director had ended on 17 July.
A bench headed by president M.M. Kumar also named justice G.S. Singhvi, former judge of the Supreme Court, to act in the capacity of an administrator with all powers, including the power to veto in the board meetings.
“He shall continue to act as managing director of Connaught Plaza Restaurants Pvt. Ltd (CRPL) subject to passing of any resolution under the chairmanship of the administrator," a 134-page order held.
It was clarified that the order was passed keeping in mind that none of the parties were oppressed during the re-election of Bakshi as managing director.
“We respect the decision of the NCLT. We are examining the judgment and exploring our legal options in the matter," McDonald’s India Pvt. Ltd said in a statement.
Bakshi, who was represented by law firm, Shardul Amarchand Mangaldas Co. in the three-year legal battle, contended that the manner in which he was ousted from the post was “illegal, mala fide, malicious and oppressive in nature" and not in accordance with the terms of the joint venture agreement.
“I feel vindicated. One still hopes we could sit across the table and resolve our issues for the benefit of CPRL. As for McDonald’s outlets, my first priority will be to ensure that we serve safe and quality food to our customers. One shall aim to get all the shut outlets operational soon," said Bakshi.
It was further alleged that McDonald’s actions were largely directed at buying him out at lower valuations, and asserted that he was committed to the business.
In 2013, McDonald’s had voted against the re-election of Bakshi as managing director of Connaught Plaza, following which Bakshi challenged his removal in the Company Law Board (now the National Company Law Tribunal ), accusing McDonald’s of mismanagement and oppression.
The same year, McDonald’s revoked its joint venture with Connaught Plaza and invoked arbitration against Bakshi. It has been pursuing arbitration against Bakshi in the London Court of International Arbitration. This was challenged before the Delhi high court.
On 23 December 2016, Justice V.K. Shali stayed the arbitration proceedings until the civil suit was disposed of or until the Company Law Board vacated its stay prohibiting any change in the shareholding of the Indian arm of the company. This order was lifted by the two-judge bench in July.
Separately, under an order passed by the Company Law Board on 16 September 2013, McDonald’s was directed to maintain status quo over the shareholding pattern and right of call option, which is still in operation.
Last month, McDonald’s shut 41 of its 55 restaurants in Delhi following its failure to renew their licences.
Harveen Ahluwalia contributed to this report.