NEW DELHI, June 23: Ballarpur Industries chairman LM Thapar has been dropped from the board of directors of the Thailand-based Phoenix Pulp and Paper Company. Thapar was one of the original promoters of the company. Ballarpur Industries Ltd (BILT) holds about 13 per cent in the Phoenix Pulp and Paper Company (PPPC), a joint venture between European Overseas Development Corporation (EODC) and BILT.

Another Phoenix Pulp shareholder, Kirit Shah of Globex Corporation, has also been dropped from the board. Globex Corporation holds around 9 per cent in Phoenix Pulp. These decisions are believed to have been taken at the company's annual general meeting held in Bangkok recently.

Of the 1,084 shareholders registered at the meeting, 964 voted for the removal of LM Thapar and Kirit Shah from the company's board of directors.A company spokesman confirmed the development, but added that "some shareholders of the company were contesting the annual general meeting results in a Thai court. He, however, declined to elaborate on the matter.

According to the minutes of the meeting, a copy of which is available with The Financial Express, a shareholder proposed that Kirit Shah and L M Thapar be removed from the board of directors. The proposal was seconded. The chairman of the meeting called for a vote on the proposal to remove Shah and Thapar from the board.

It is understood that the ouster is the result of an ongoing corporate battle between another shareholder and Phoenix Pulp and Paper executive vice-chairman George Davison, who represents European Overseas Development Corporation.

The European Development Corporation holds around 30 percent in Phoenix Pulp and Paper and Globex Corporation. In 1994, the European Overseas Development Corporation warded off attempts by Globex to take over Phoenix. Davison has also filed a petition against Thapar and three others in a Thai civil court demanding a compensation of nearly Rs 65 crore.

Earlier, he had lodged a complaint in the Enforcement Directorate (ED) and the Department of Company Affairs (DCA) charging Thapar of manipulating Phoenix Pulp and Paper rights issue to facilitate its takeover by Globex.

The directorate enquiry is still on. The Department of Company Affairs had initiated prosecution proceedings against BILT for improper maintenance of books of account and non-disclosure of facts in its balance sheet.

The Registrar of Companies has filed a case in a Mumbai High Court. DCA has also served a show-cause notice to the company for violation of Sections 209 (5), 211 (7) and 372 of the Companies Act, 1956.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.