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Boby Kurian

BANGALORE, May 5

IN a significant step, talks are on between the two feuding families of the Indian spirits business to resolve their differences.

Aided by some political intervention, negotiations have taken place between the UB group Chairman, Mr Vijay Mallya, and the estate of the late Manu Chhabria, promoters of Shaw Wallace & Co Ltd, to reconcile differences, including a 17-year-old legal battle in a Hong Kong court.

Speaking to Business Line, Mr Vijay Mallya, said talks have taken place between him and the Manu Chhabria family through intermediaries to resolve some of the vexed corporate disputes in the Indian liquor scene.

"I am for settling all legal disputes out-of-court, amicably. I don't want any legal fight with Mrs Chhabria and her three daughters," Mr Mallya said.

Mr Mallya added that he was not interested in legal tussles unless he was "forced into it".

Sources close to the Chhabria family confirmed the talks stating that "reconciliation based on mutual respect for each others' corporate identities will help both the parties to reap benefits in a changing market place".

The confirmation of talks to resolve the past disputes, including financial claims, closely follows reports suggesting that both UB group and Shaw Wallace may work together to break the stranglehold of liquor contractors in many north Indian States.

In recent times, Mr Mallya has talked about the need to work together in presenting their common cause to the State Governments.

Any sort of rapprochement between Mr Mallya and the Chhabrias may stifle the aspirations of multinationals in the domestic alcoholic beverage market. The two warring families presented a disunited front that helped multinational companies make rapid inroads into the local market.

The latest development also leaves detractors like Mr Kishore Chhabria, an estranged younger brother of Manu Chhabria and a former ally of Mr Mallya, in the lurch.

However, industry watchers have reacted to the news of talks between Mr Mallya and the Chhabrias with cynicism. "We have heard of parleys between the two camps, including efforts made by a prominent political friend of Mr Mallya, but it is doubtful whether they have the resolve to end corporate bickerings dating back to almost two decades," sources said.

The most prominent of the disputes is a court case in Hong Kong pertaining to the acquisition of Shaw Wallace by the late Manu Chhabria in 1986. The case is reportedly based on the premise that Mr Mallya supported Mr Chhabria's efforts to buy Shaw Wallace and the former was denied his due post-acquisition. The Chhabria family forever has denied any role for Mr Mallya in Shaw Wallace takeover and has treated it as a closed chapter.

The latest turn of events has puzzled observers. Mid-way last year, the UB group fired a legal salvo against corporate restructuring in Shaw Wallace by moving the Mumbai High Court. This had dashed the hopes of mellowing relationship between Mr Mallya and the Chhabrias, especially after the former visited an ailing Manu Chhabria at a Mumbai hospital in April last year.

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