Promoters for Hotel Leelaventure on Monday told the National Company Law Tribunal that minority shareholder ITC was trying to scuttle their deal with Brookfield, because the Canadian asset manager could pose it challenges in the hotels industry in India.
ITC, which held a 7.92% stake in Leelaventure at the end of March as per stock exchange data, had moved the NCLT, complaining oppression of minority shareholder interest and mismanagement by the promoters and JM Financial ARC that held a 26% stake in the hotels chain after the conversion of debt into equity. The tobacco-to-hotels conglomerate had also filed a separate application seeking a waiver of the 10%-shareholding threshold needed to raise such complaints against a company.
Leelaventure told the NCLT that ITC wanted to block its deal with Brookfield to sell some properties because it didn’t want to face a “global giant” with hotel assets worth $13 billion. “ITC is currently a rival to Brookfield and does not want to face Brookfield once it comes to India with all its might,” Ravi Kadam, a senior counsel appearing for the promoters of Leelaventures, told the tribunal.
Kadam was also responding to ITC counsels’ claim that Brookfield, being a PE fund, did not have expertise in running a premier hotel chain in India and was hence paying Rs 300 crore to the promoters of the company and entering into “side deals” with them while leaving minority shareholders out.
