As the tug-of-war between the rival groups rages, tension is mounting at Asianet's corporate office here, where Nair is physically obstructed from attending office. The curious developments which are being viewed as part of the takeover tremors lately experienced by the Kerala-based satellite-cable TV company have now led to a legal battle with the matter being taken to court.

Nair, who was originally the nominee of the Chennai-based holding company, Asianet Communications Ltd (ACL), has filed a petition before the Thiruvananthapuram Munsiff Court praying that he be allowed to function as ASCL MD. Holding company ACL president and TV personality Sashi Kumar has filed a counter-affidavitbefore the court defending the decision to remove the ASCL MD and alleging that Nair had driven the company to a serious financial crisis.

Nair was formerly the director of the Central Bureau of Investigation (CBI) before he joined Asianet in 1995 as a director. Within a year, he was appointed managing director for a period of five years. Nair has three more years to go before his term expires.

The Rahejas, who now have the upperhand on the Asianet board, have come to the rescue of the MD. The Rahejas have not approved Sashi Kumar's decision to ease out the MD though he had ceased to be the holding company's nominee on the ASCL board.

Rahejas' Hathway Investments Pvt Ltd purchased 50 per cent of ACL's stake in ASCL at a price of Rs 55 per share in 1994. Shares of the face value of Rs 3.5 crore were purchased at a consideration of Rs 19.25 crore giving the ACL promoters a profit of Rs 15.75 crore.

Another advantage of the deal was that Hathway had agreed to invest Rs 13.25 crore worth of capital inASCL. Therefore, the original promoters, ACL, who had no money to invest in ASCL, got ample leverage to invest a further Rs 13.25 crore in the equity capital of ASCL by getting Rs 19.25 crore on sale of shares worth Rs 3.5 crore, so that the original promoters of ASCL and Hathway Group had equal holding in ASCL. The 10-member board therefore had five nominees of Hathway and another five of ACL.

The strained relations between ACL president Sashi Kumar and ASCL MD Nair, the former's nominee on the ASCL board, had upset the balance of power in the board. Sashi Kumar, sensing danger, withdrew the nomination of Nair. When the ASCL board met here last week, this was included as an additional item on the meeting's agenda. All five nominees of the Hathway Group were present at the crucial board meeting while only two ACL nominees, including president Sashi Kumar and ASCL chairman P Bhaskaran were there, besides Nair.

Sashi and Bhaskaran insisted that the withdrawal of Nair's nomination be discussed first. Thiswas resented by Hathway nominees who said that only after all other items on the agenda were discussed, could the additional item be taken up. Bhaskaran abruptly adjourned the meeting. However, the remaining members on the board barring Bhaskaran and Sashi Kumar went ahead with the meeting and reinstated Nair as MD. Nair refused to comment on the developments. He said the issue was before court. Sashi Kumar left for Chennai on Thursday. The Rahejas are also tightlipped about the issue.

Nair is the second MD in ASCL to have had an inglorious exit. His predecessor and founder MD, V Sivasankaran, too, had to leave Asianet unhonoured. While Sashi Kumar is the president of ACL, his father-in-law and popular Malayalam poet P Bhaskaran is the chairman of its subsidiary, ASCL, set up in 1992. Prior to the Rahejas investing in Asianet an American company, Falcon, had come forward to contribute to the equity of ASCL. But the US-based company later withdrew the offer. The Rahejas have been of late been in a bid toconsolidate their hold in media business.