"It (Lodha's stake in Pilani) does not worry me at all because we now have more than 50 per cent stake in Pilani, but I am sure we are going to fight him out in court," B K Birla said.
Birla's comments came a day after he and Kumarmangalam signed an agreement to buy out the combined 27 per cent stake of G P Birla-C K Birla and S K Birla groups.
B K Birla said the total cost of the buy out was around Rs 300 crore (Rs 3 billion) at Rs 1500 per share of Pilani and it was entirely funded by Kumarmangalam, who headed the Aditya Birla group, the largest Birla empire.
He also said that he had received a definite commitment from his elder brother, K K Birla, for selling his little above seven per cent stake to him at a later date. "This makes our position very strong in Pilani as we will have more than 50 per cent stake in the company," he said.
A total of 25 per cent stake in Pilani is held by M P Birla group which is now under control of Rajendra Lodha as per a purported will of Priyamvada Birla, the widow of M P Birla, and which has been challenged by Birlas in the court.
When asked whether the move by the Birlas to consolidate their position in Pilani was a show of a united front against Lodha, B K Birla said, "Yes, we are completely united on this."
B K Birla said he had already chalked out succession plans for the companies under his control. As per his plan, Century Textiles and Century Enka would go to Kumarmangalam Birla, Jayshree Tea to daughter Jayshree and Kesoram Industries to another daughter, Manjushree.
He said that he was yet to decide about a few other companies like Mangalam Cement and Mangalam Timber. Birla said the untangling of the cross-holding by different Birla families had been expedited in recent times.
The matter had been pending since the mid 1990s when his son, Aditya suddenly died. He said that the partition of the Birla empire among different families took place in 1986 in which more or less all companies were covered, but only Pilani Investments was left out.
"It was agreed by all at that time that I will be the chairman of Pilani till I am alive and after me my son Aditya will head the company. But following the death of Aditya in 1995 everybody asked me what will happen now and hence we started to think about consolidation of the holding," he said.
He said that there was never any problem about the functioning of Pilani Investments when Priyamvada Birla was alive as, "I had started a practice of meeting at her office in Mumbai 45 minutes before the board meeting to reach a consensus on every point including dividend."
Priyamvada Birla died in July last year and immediately afterwards Lodha, who had been helping her in running the company since her husband's death in 1990, stunned the Birla family by declaring that she has bequeathed the entire M P Birla group to him by a will prepared in 1990.
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