BITTER FIGHT: Basant Jhawar accuses nephew and MD of the company Rajeev of orchestrating his ouster
The temporary truce that was achieved between the feuding promoter families of Usha Martin at the time of selling the company's steel business to Tata Steel has been shattered with the recent removal of family patriarch and group founder Basant Jhawar from the Board of group flagship entity, a leading wire rope maker of the country.
The family patriarch has now opened up on the bitter battle alleging back-stabbing by his nephew Rajeev, the managing director of the company, by orchestrating his removal on the sly.
"Even though the management headed by Mr Rajeev Jhawar had sent resolution for my continuation to the Board for consideration and approval, at the shareholders' meeting, it voted against my continuation. By voting against, they have flouted the shareholders' agreement between the two families," Basant has alleged in a statement issued on Monday.
During the course of the feud which came to light following the removal of Prashant Jhawar from the post of chairman in April 2017, his father Basant Jhawar largely remained silent on their differences with the rival faction consisting of his brother Brij and his son Rajeev.
With the special resolution for the continuation of Basant Jhawar, 83, as the non-executive director of Usha Martin defeated in the vote by shareholders, the co-founder of the group stepped down following an extraordinary general meeting (EGM) held on March 30.
A study of the voting pattern in the shareholders' meeting shows that 48.33% of the votes of the promoters' category plus all of the public institutions went against the resolution while another resolution for reappointment of Brij Jhawar got passed.
"Passing of the resolution for my removal is being depicted as being done by institutional shareholders even though Indian institutions, insurance companies and mutual funds hold only 1.05% of the equity of the company," Basant alleged.
The five-page statement revived allegation of syphoning of funds to foreign countries by Rajeev Jhawar, non-disclosure of past liabilities and several issues relating to the utilisation of proceeds of the sale of 1-million-tonne steel facility to Tata Steel.
However, the bankers to Usha Martin, particularly State Bank of India (SBI), have been backing Rajeev Jhawar, who was instrumental in removing Prashant from the post of chairman and in now removal of Prashant's father in the recent EGM.
Post his removal in 2017, Prashant also filed a case against SBI at the Calcutta High Court.
Rajeev Jhawar refused to comment on Basant's statement citing sub-judice nature of the case.
"The decision of the Board and shareholders for sale of steel business to Tatas is on track. The company is unable to comment on any aspects, especially related to matters which are sub-judice," a statement from the management of Usha Martin said.
Declarations made by the Prashant-Basant faction at the court have revealed a shift in the stand of SBI, which, they claimed, initially supported active involvement of Basant in the management, putting it as a key condition for extending additional credit facilities of Rs 1,190 crore.
Prashant's lawyers claimed that having exploited and utilised reputation of Basant to obtain the credit facilities, the rival camp "colluded and conspired to completely strip and denude of all powers and in the process rendered him completely toothless", as per court records.
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 "Rajeev Jhawar (left) and Basant Jhawar")
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