Counsel for employees said the company could not act against the board of directors because it was controlled by them.

Under Section 397 of the Companies Act, employees have filed application before CLB for removal of present board of directors of SWC.

Employees alleged that funds were diverted from Shaw Wallace to other companies by the directors following instructions from SWC chairman Manu Chhabria.

Seeking the appointment of independent persons as directors, the federation said several resolutions authorising Chhabria alone to take important decisions proved that directors acted hand in glove with the Dubai-based NRI industrialist.

Chhabria has not come to India for almost two years, the counsel said adding that because he could not come to the country, company executives hadto go to Dubai.

Price Waterhouse, Lodha and Company and Batliboi and company refused to certify the accounts of SWC because they found it in mess, he alleged.

SWC counsel contended that the company had shown good results and management had taken several steps to improve its performance.

Under Section 408 of the Companies Act, Department of Company Affairs (DCA) has filed application for appointment of additional directors representing the government and financial institutions.

DCA counsel A K Vali contended that CLB should immediately consider appointment of a director in place of L C Gupta.