"At a recent board meeting of Herbertsons Ltd, the members approved the appointment of Vijay Mallya as the managing director with immediate effect," said the statement "This appointment has now been cleared by the department of company affairs, government of India vide a communication dated December 8, 1998, under Section 269 of the Companies Act," it adds.

"The board thought it fit to ask Mallya, chairman, to function concurrently as managing director to oversee the functioning of the company in the light of his vast experience in this business at this crucial juncture," says the release.

The release cites competition frommultinationals as the reason for Mallya's assuming the MD's chair, but in fact, his appointment is part of the ongoing struggle with Kishore Chhabria for control of the company.

He had ceded around 24 per cent to Chhabria in a mutual agreement two years ago, but since then, Chhabria has raised his stake to around 48 per cent in the company, and is now seeking management control. Mallya does not wish to concede that, and has gone to Sebi complaining that the stake hike by Chhabria through three deals should be deemed invalid, since they allegedly violated terms of the takeover regulations.

Chhabria has protested against this, saying his transactions were valid, and has also lodged an open-offer document with Sebi for approval. No decision on this is, however, forthcoming.

Meanwhile, Mallya went to the DCA with a request that he be allowed to take over as managing director. The DCA approval puts him ahead in the battle for control, because, with the crucial post in his pocket, Mallya can drivedecision-making in the company easily.

Sources, however, said that it was possible Chhabria would counter this by going to the DCA and requesting that he be allowed to assume office as executive chairman as the holder of 48 per cent stake in the company. But this could not be confirmed.