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Kishore renews open offer bid for Herbertsons

Arijit De

After a three-year wait, Kishore Rajaram Chhabria, Manu Chhabria's younger brother, is renewing his bid to make an open offer for 20 per cent of liquor major Herbertsons' equity. Herbertsons is controlled by his former ally, UB Group chairman Vijay Mallya.

Chhabria's aim: to gain control of Herbertsons and oust Mallya to end the six-year-old dispute.

Control of Herbertsons is also critical because of BDA Distilleries, a wholly owned Herbertsons subsidiary that Chhabria controls. BDA owns mega brands like Officer's Choice.

Chhabria, who is vice-chairman of Herbertsons, controls a 49 per cent stake in Herbertsons through his uncle. Chhabria himself doesn't own a single share.

Some 3 per cent of this equity stake is still under dispute. Mallya, whose UB Group has effective control of the company, holds only around 35 per cent along with associates.

Kishore Chhabria entered Herbertsons after he split with brother Manu when rival Mallya offered him a 26 per cent stake in the UB company. Chhabria had brought to the table BDA Distilleries, which he wrested control of from Manu.

BDA became a Herbertsons subsidiary in return for the 26 per cent stake. Kishore subsequently quietly increased his stake to 49 per cent through open market purchases, a development that later triggered off the rift with Mallya.

Chhabria has now begun to mount pressure on the Sebi for it to clear the open offer. In January 1998, the Sebi had said that Chhabria had to make an open offer for flouting the takeover code.

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