NCLAT TO DECIDE FATE OF 169 OUTLETS, 6,500 JOBS TODAY
MCDONALD’S-BAKSHI ROW
The appellate court of the National Company Law Tribunal (NCLAT) will on Thursday decide the fate of the 169 McDonald’s outlets and almost 6,500 jobs affected by McDonald’s India’s (MIPL) termination of license agreement with Connaught Plaza Restaurants (CPRL). MIPL had terminated the pact last month, citing “default in payment of royalties”. CPRL is a 50:50 joint venture between MIPL and Vikram Bakshi. Bakshi had filed a fresh appeal in the NCLAT on Wednesday after the National Company Law Tribunal dismissed his plea challenging MIPL’s termination notice on Tuesday.
The appellate court of the National Company Law Tribunal (NCLAT) will on Thursday decide the fate of the 169 McDonald’s stores and almost 6,500 jobs affected by McDonald’s India’s (MIPL) termination of licence agreement with Connaught Plaza Restaurants Ltd (CPRL).
MIPL had terminated the pact last month citing “default in payment of royalties”. CPRL is a 50:50 joint venture between MIPL and Vikram Bakshi. Bakshi had filed a fresh appeal in the NCLAT on Wednesday after the National Company Law Tribunal (NCLT) dismissed his plea challenging MIPL’s termination notice on Tuesday. A second plea by Bakshi against MIPL, alleging interference by the latter in the affairs of CPRL, saw the NCLT on Tuesday issue a show-cause notice to McDonald’s for contempt of court.
On Wednesday, Justice G S Singhvi, the court-appointed administrator on the board of CRPL, asked both sides to await the NCLAT’s Thursday decision before deciding on the fate of the 169 stores.
While mostMcDonald’s stores in the Delhi-NCR region have downed shutters, some in the Connaught Place area were running onWednesday, despite the 15-day notice period for termination lapsing on Tuesday, people in the know said.
In a statement, Bakshi, who was reinstated as MD of CPRL in July, said, “Whilst the honorable NCLT had restored my position as MD from August 6, 2013, in the board meeting (of CPRL) today (Wednesday), I have been elected as MD again for further period. The administrator on the board of CPRL has asked both sides to await NCLAT’s decision. I am resolute in my determination to fight this injustice that shall affect the livelihood of thousands of Indians.”
Almost 6,500 people are directly employed by CPRL to run the 169 affected stores. While Bakshi (with Bakshi Holdings) and McDonald’s India hold an equal number of equity shares in CPRL, over the years McDonald’s has pumped ~193 crore against non-convertible preference shares.
According to sources, to clear the mess and initiate its business with a fresh approach and a new partner, McDonald’s is considering writing off its investments in CPRL.