The ongoing tussle between the Mumbai-based Wadia group and European food major Groupe Danone, which was scheduled for a hearing in the Bombay high court on January 10, will now be heard on January 12.
The hearing is on an appeal filed by Danone against the earlier judgement. The case was filed by the Wadia group to stall Danone's investment in the Bangalore-based bio-nutritional company, Avestha Gengraine Technologies (Avesthagen).
Danone, through its wholly owned subsidiary daninvest.com, had invested five million euros to buy five per cent stake in Avesthagen.
The Wadia group sought to block this saying that the investment violated the joint venture agreement between the group and Danone. At the initial hearing on December 5, 2006, the high court had passed a restrain order on share transfer till the next hearing.
The two business groups, Wadias and Danone, had come together in 1995 to set up Wadia BSN, a foods company to manufacture and/ or distribute Danone's food brands in the country.
In October 2006, Danone approached Wadia BSN with a proposal to invest in Avesthagen.
As per the joint venture agreement, if either partner spotted an opportunity in the foods and beverages space in the country, this opportunity was to be first presented to Wadia BSN.
If any partner was unwilling to invest in the company, then the other was free to do so independently, provided it did not harm the existing activities of the business.
According to the court petition, Nusli Wadia and group directors met the Avesthagen management along with their merchant banker Morgan Stanley.
Having decided to invest in the firm, at the board meeting of Wadia BSN, the Wadia representative voted in favour of picking up five per cent stake in Avesthagen for five million euros.
The trouble began when the Danone representative voted against investing in Avesthagen, hence preventing Wadia BSN from going ahead with the investment.
But the very next day, Danone informed the Wadias that with the Wadia BSN board having failed to reach a consensus on the matter, it would be investing independently in Avesthagen through its wholly-owned subsidiary, daninvest.com.
After being unable to block this investment, the Wadias took Danone, daninvest.com, Avesthagen and Wadia BSN to court citing the violation of the joint venture agreement.
The issue comes in the wake of Britannia declining to share its financial performance with Danone, which along with the Wadia group is the majority shareholder in the company.
The company said that it would release the information to Associated Biscuits International Holdings in which Danone and the Wadia's have an almost equal stake and which is a shareholder in Britannia.
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