Ahmedabad: The National Company Law Tribunal (NCLT) has approved the equal distribution of the Gujarat-based Vadilal Group after a prolonged legal battle. Managed by the Gandhi family, the Vadilal Group has encountered internal conflicts over division for quite some time. The NCLT has now delivered its verdict on the demerger of the business, estimated to be valued at 3400 crores.

The tribunal pronounced its order in a petition filed by Virendra R. Gandhi, with Vadilal International Pvt. Ltd. (VIPL), Rajesh R. Gandhi, Devanshu Gandhi, and others named as respondents. In its 18-point judgment, the NCLT allowed for the division and ordered both the petitioner and respondents to contribute Rs 10 lakh to the Prime Minister’s National Relief Fund for repeatedly and unnecessarily submitting various affidavits.

The petitioner alleged misuse of group funds for personal gain under the guise of loans. It was claimed that Rajesh and Dewanshu illicitly withdrew funds from Vadilal Group companies. These funds were allegedly loaned to Veronica Construction Pvt Ltd, which subsequently dispersed the money among members of the Rajesh and Devanshu Gandhi families. The petitioner also asserted that Rajesh and Devanshu Gandhi jointly owned 60% of Veronica’s shares and used Vadilal Group funds for personal land acquisitions, including an unauthorized withdrawal of Rs 38 crore in March 2013.

As per the order, the families led by Virendra R Gandhi, Rajesh R Gandhi, and Devanshu L Gandhi can use the ‘Vadilal’ trademark registered under VIPL until the companies are divided as instructed. The division of all family businesses among the three families will occur after appointing a Court Commissioner.

Advocate Dharmishtha Rawal has been appointed as the court commissioner to oversee the demerger process, with both the petitioner and respondents required to pay Rs 5 lakh each as her fee. Former Director General of MCA Mahesh Shah will serve as an observer, receiving a monthly fee of Rs 2 lakh from Vadilal Group, and will submit independent reports to the Ministry of Corporate Affairs in Ahmedabad. Manish Kaneria has been tasked with valuing the company and must present his report to the court within three days of the order. Deloitte has been appointed to audit the company, and a temporary chairman and managing director will be appointed during the demerger process. DeshGujarat