Nilgiris family gains advantage in rights issue row

The family had approached the CLB to block the Rs 35 crore rights issue proposed by global equity giant Actis, which owns 65 per cent stake in the family-run retail giant. Actis picked up this stake in 2006.

While ordering an interm stay on the rights issues, CLB, on the first hearing on Friday said that there should be no further allotment of shares with respect to the issue untill further orders. However, the management, run by Actis, has maintained that it will bring in its share of the money by Saturday, as the company is in need of funds to run the business. It is learnt that the original promoters have no problem with money coming to the company but they are opposing allocation of shares. Although, the rights issue has triggered into an official spat now, sources believe that there has been several other differences between Actis and the family, ever since the UK firm invested Rs 300 crore for buying 65 per cent stake as a few family members opposed the stake sale to Actis. And further, it is said that selling three of the hospitality properties under Nilgiris to Chennai-based Sabari Hotels recently had also led to the family’s dissatisfaction. Apparently, the company management decided to retain the sale proceed of Rs 100 crore with the company but the family members wanted to share it in the form of dividend.