Developments comes in a petition filed by Aditya Birla Real Estate Fund
CHENNAI: The Madras High Court has restrained L&T Realty Limited from selling its stake in L&T South City Projects. The development follows a petition by Aditya Birla Real Estate Fund, a shareholder in the project.
L&T Realty Limited executed a share purchase agreement for the sale of its 51 per cent stake in L&T South City Projects Private Limited to Pragnya Group, an investment firm. The stake sale was estimated to be around Rs 190 crore. Limited scalability of the business in the project for L&T Realty Ltd was the rationale behind the sale, said the company.
Meanwhile, the company in a disclosure to the Stock Exchanges said that the third shareholder, Aditya Birla Real Estate Fund, has filed an application under Section 9 of the Arbitration & Conciliation Act 1996 in the High Court of Madras.
The Court has passed an interim order restraining the company from giving effect to the transfer of shares by L&T Realty to Pragnya till disposal of the arbitration proceeding in the High Court. The company has also been barred from holding a board meeting, till counters are filed by L&T Realty Ltd and Pragnya Fund-I.
The company said though the documents pertaining to completion of share transfer along with the filings to the exchanges were submitted to the Court, they have not been duly considered in the interim order.
The share transfers were completed prior to the interim order along with prayer for vaction of the order, L&T Realty said.
L&T South City Projects is engaged in the development of a 92-acre residential township at Siruseri, one of the IT hubs located at Old Mahabalipuram, Chennai.
The net worth of the SPV was Rs 134.05 crore as on March 31, 2016.
The buyer, Pragnya Group, is an investment firm that focuses on fund management, property development and asset management.
The Group has been involved with L&T South City Projects and the development of the Siruseri project since its inception.