McDonald’s faces heat, Bakshi challenges termination deal
The war between global fast-food giant McDonald’s and its estranged partner for north and east India operations has worsened.business Updated: Dec 05, 2013 23:05 IST
The war between global fast-food giant McDonald’s and its estranged partner for north and east India operations has worsened.
Connaught Plaza Restaurants Ltd (CPRL) hit back on Thursday at the US chain for unilaterally seeking to terminate their joint venture two days ago, and described the burger giant’s move as ill-intentioned.
Vikram Bakshi-controlled CPRL, according to sources close to the development, has written back to McDonald’s India Pvt Ltd (MIPL) that the “purported termination has not and cannot take effect,” and calling it a “a blatantly malafide attempt”.
CPRL, a 50:50 joint venture formed in 1995, runs 150 McDonald outlets in north and east India.
In a sudden turn of events this week, McDonald’s terminated its JV agreement with CPRL and moved the London Court of International Arbitration to settle the legal dispute between the two.
The dispute between McDonald’s and Bakshi started when two McDonald’s nominees on the four-member board of the fast-food chain rejected a proposal to renominate Bakshi as MD at a meeting on August 6 this year.
On August 30, McDonald’s removed Bakshi as its India MD and announced that the JV would be run instead by the board. Bakshi has challenged this in the Company Law Board.
Bakshi in an email on Thursday told his colleagues that the termination notice is “a blatantly malafide attempt by MIPL to oust the caretakers of McDonald’s brand for the last 18 years,” sources told HT.
Both MIPL and CPRL did not respond to HT’s email seeking responses for this story.
Bakshi, sources said, has told colleagues that MIPL was “hounding” CRPL to sell equity in the JV and will take “appropriate steps.”
MIPL, sources said, had sent out a similar mail informing employees on December 3 that the JV with CPRL had been terminated.