Two brothers, Ashok K. Mittal and Ram Parshottam Mittal, also known as R.P. Mittal, are at odds over who controls the management and ownership of Hotel Queen Road Private Limited, also known as HQRPL, which owns the hotel property known as “Hotel Royal Plaza” in the nation’s capital. A petition has been filed in the NCLT regarding this dispute.
The petition aims to confirm HQRPL’s status as a publicly traded corporation.
Additionally, it aims to certify that R.P. and Sarla Mittal’s removal from their directorships in the EOGM was legitimate and lawful.
Furthermore, the July 2009 rights issue was legitimate and lawful. The notification to subscribe for shares was sent to R.P. Mittal. As a result of their voluntary refusal to purchase shares, the R.P. Mittal group is unable to contest the rights issue.
With 91.76 percent of the shares, the Ashok K. Mittal group has been in charge of and managing HQRPL since January 14, 2009. With only 8.24% of the market, the R.P. Mittal group is a minority shareholder.
A demerger strategy was authorized in 2002 as part of the ITDC’s disinvestment plan, transferring the hotel property to HQRPL, a newly established business.
When HQRPL (which was then governed by the Government/GOI) called an Extraordinary General Meeting (EOGM) on September 30, 2002, a special resolution was approved to turn the business into a public limited company.
When Ashok Mittal took over HQRPL in January 2009, the bank account was only holding Rs 2.82 lakhs and the company’s account had been labeled non-performing.
The hotel lacked a decent function center, swimming pool, and gym in addition to having subpar accommodations.
The hotel needed to be upgraded and renovated to match international standards as the ASIAD games drew near.
HQRPL decided to perform a rights issue of shares in response to the urgent need for funding, and on September 30, 2009, it sent out an offer letter.
HQRPL offered the shares at a fair price of Rs 40 (10+30) apiece, despite the fact that a valuer determined the market value of the shares to be Rs 143 per share.
In an application, R.P. Mittal requested a stay on the rights issue.
By a ruling dated August 18, 2009, the High Court declined to halt the rights issue, noting that the firm stands to gain from the rights issue since the price at which shares are being offered is much less than their market worth.
The court noted that R.P. Mittal would remain a majority shareholder if he subscribed, and that his choice to not subscribe would be the product of his own free will.
The planned offer of rights issue included nothing unlawful or repugnant, according to the top court.
It has been more than 14 years since the HQRPL rights dispute occurred.
The money raised by the rights sale was used to pay down HQRPL’s debt.