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NEW DELHI|KOLKATA: A row between two branches of the Jhawar family that founded Kolkata-based Usha Martin has intensified, with one side accusing the other of financial irregularities.
Basant Jhawar, 82, and his son Prashant Jhawar have filed complaints at the National Company Law Tribunal and the Calcutta High court in pursuit of their claim.
They have alleged that Rajeev Jhawar, Basant Jhawar’s nephew, orchestrated their dismissal from Usha Martin in April last year, although both remain on the board of the company. Managing director Rajeev Jhawar dismissed the allegations as “false and baseless” in his response to ET’s queries.
The matter has also been brought to the attention of the finance ministry and government departments, the complainants said.
Basant and Prashant Jhawar–formerly chairman emeritus and non-executive chairman, respectively–have asked the NCLT to reinstate them on the board of Usha Martin in their previous capacities, the appointment of an independent administrator to run the company, a freeze on the sale of assets and changes in its capital structure besides the appointment of an investigator to examine the allegations of wrongdoing.
The tribunal had said shareholding structure should be left unchanged while the case is being heard. Both sides have equal stakes in the listed company.
“As directors of the company, we are suspecting irregularities. This should be investigated. If no wrongdoing is found, the management stands exonerated,” Prashant Jhawar told ET. Rajeev Jhawar’s father Brij Kishore Jhawar and Basant Jhawar are brothers.
The Usha Martin board passed a resolution on April 25 last year removing Basant Jhawar as chairman emeritus and Prashant Jhawar as non-executive chairman for refusing to pledge their shares to lenders under the terms of a restructuring agreement and blocking the sale of the company’s wire ropes business, said to be essential for reducing the company’s Rs 3,000 crore debt load.
Rajeev Jhawar, who had abstained from voting on the resolution, stayed on as managing director.