Last year, the US-based, $85-billion private equity firm Lone Star Funds approached the tribunal against RattanIndia Finance, alleging irregularities and mismanagement in the company. The fund was seeking the tribunal’s intervention to appoint an independent professional and a full-time CFO of the company.
“Respondent No 1 (RattanIndia Finance) shall issue an appropriate order appointing Bipin Kabra as CFO of the company,” said the bench presided by judicial member BV Balram Das in its order of March 29. “Bipin Kabra, after being appointed as CFO, shall disclose all particulars about his concern and interests in any other company or companies.”
The tribunal has also said in its 12-page order that after his appointment as CFO, Kabra will have to take necessary steps for the relinquishment of his interests in other company/companies.
Before that, senior advocate Kapil Sibal, appearing for the Lone Star unit, had argued that as per Article 140 of the Article of Association (AoA) of the company, the fund has a right to nominate and appoint a CFO. “In case, respondents do not accept the petitioner’s first and second nomination, the petitioner may nominate a third candidate to which the respondents have to accept,” argued Sibal.
Earlier, the US-based fund had suggested the names of Devendra Mehta and Venkatraman Subramanian, which were rejected by the company. Later, the Lone Star subsidiary had nominated the name of Bipin Kabra, which was also rejected by RattanIndia Finance.
However, countering this, senior counsel Ranjit Kumar appearing for Rajiv Rattan and others, argued that the petitioner (LSF 10 Rose Investments) has filed multiple applications for similar relief, which in itself is an abuse of the tribunal’s process. He also argued that the main objection against Bipin Kabra is that he is associated with other companies that provide financial services.