McD Not Quite On Track
On July 14, the National Company Law Tribunal (NCLT) reinstated Vikram Bakshi as managing director of Connaught Plaza Restaurants Limited (CPRL), a joint venture with McDonald’s of the US. The ruling came at the end of proceedings that had gone on for four long years.
Bakshi was ousted as managing director of CPRL, which manages 168 McDonald’s outlets in north and east India, in a board meeting on August 6, 2013. The joint venture dates back to 1995.
Bakshi took the issue to the Company Law Board, the earlier avatar of the NCLT. At the end of the prolonged proceedings, the tribunal reinstated Bakshi as CPRL managing director.
McDonald’s has said that it respects the court’s decision and is examining the judgment. Of course, it is exploring its own legal options too.
McDonald’s began arbitration proceedings against Bakshi in the London Court of International Arbitration when it ousted him from the board in 2013. The hearing is over and a judgment is awaited.
Bakshi told BW Businessworld that he was confident of the outcome of the London court’s ruling and believed that it would have to evaluate NCLT’s order. “We have sent this order to them,” he said.
As many as 43 of McDonald’s 55 outlets in New Delhi have shut down, because their licences are due for renewal. There is no indication that the restaurants will open any time soon. The closed restaurants could lead to a loss of business that could swell to as much as Rs 15 crore.
“There was an issue in terms of compliances and my job is to ensure that these compliances are there,” Bakshi said, adding, “Now that I am fully empowered to take decisions about the company, my immediate job is to try and reopen these restaurants as soon as possible.”
Bakshi’s task is to get McDonald’s on track. “I have a job that has been given by this order from NCLT to help this company find the best ways to run it. I have the adequate knowledge, experience and therefore, belief of the NCLT bench to head this company,” he said.
Bakshi said his core focus would be to provide safe and quality food to the customers of the restaurants that are still in operation. He would then want the suspended restaurants back in operation.
His third priority would be to ease the pain of employees running the business. Media reports suggest that jobs of around 1,700 employees were at stake. Bakshi denied the reports and said that he never had any plans of laying off staff.
Getting the restaurants back in shape is another priority for Bakshi. The company plans to replace equipment and remodel restaurants. “We believe that we should be able to generate enough cash,” Bakshi said confidently.
