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CPRL board to meet on Sunday to discuss McDonald’s franchise issue

LiveMint logoLiveMint 15-09-2017 Harveen Ahluwalia

New Delhi: The board of Connaught Plaza Restaurants Pvt. Ltd (CPRL), the joint venture between Vikram Bakshi and McDonald’s India Pvt. Ltd, is planning to meet on 17 September to discuss the termination of the franchise agreement by the fast-food chain, two people familiar with the development said.

The meeting will be presided over by former Supreme Court judge G.S. Singhvi, who was appointed as an administrator on the board of CPRL by the National Company Law Tribunal, or NCLT. CPRL is the north and east India licensee of the American fast-food chain and operates 169 McDonald’s restaurants.

“The meeting has been fixed for Sunday. The main agenda is to discuss the termination of the franchise agreement by McDonald’s. Other issues regarding the outlets which have been shut down may also be discussed,” said one of the two people cited above on condition of anonymity.

On 21 August, McDonald’s India terminated its franchise pact with CPRL for all 169 outlets, citing non-payment of royalties as the primary reason. According to the termination notice, Bakshi was supposed to cease using the McDonald’s name, trademarks, designs, branding, operational and marketing practices, policies, food recipes and specifications from 6 September.

However, all the outlets have continued to operate except for 43 in the national capital that were shut in June due to CPRL’s failure to renew the licence. The closure of the restaurants would affect 6,500 McDonald’s employees.

McDonald’s India did not respond to an emailed query.

The board meeting comes a week after the National Company Law Appellate Tribunal, or NCLAT, refused immediate relief to Bakshi on a plea challenging the fast-food chain’s termination of the franchise agreement. NCLAT had said it would hear Bakshi’s interim plea along with the main appeal scheduled for hearing on 21 September, following which Bakshi had requested the NCLT-appointed administrator G.S. Singhvi to call a board meeting to discuss the matter.

The Bakshi-McDonald’s India row goes back to 2013, when the latter voted against his re-election as managing director (MD) of CPRL. Following this, Bakshi challenged his removal in the company law board (now NCLT).

NCLT reinstated Bakshi as MD in July. McDonald’s challenge to the NCLT order is pending before NCLAT.

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