This burger is in Tussle – Is it Vikram Bakshi’s or McDonald’s

McDonald’s foot-prints can long back traced in India since 1996, when its first store was opened in New Delhi’s Basant Lok market; with its local joint venture partner, Connaught Plaza Restaurants  Limited (CPRL).

CRPL is 50:50 joint venture of Mr. Vikram Bakshi and McDonald India Private Limited (MIPL) with four board members, Mr. Bakshi as Managing Director, his wife and rest two are McDonald’s representative.

CPRL is/was master franchises for operating McDonald’s outlets in North and East India. (For West and South region it is Hardcastle Restaurants). CPRL operates around 169 outlets out of total 430 (approx) outlets in across country.

Dispute arises in August 2013, when McDonald’s ousted Bakshi as managing director of CPRL over alleged financial irregularities by voting against him.

In September 2013, Mr. Bakshi moved to Company Law Board (Now National Company Law Tribunal – NCLT) with plea his removal from MD office was oppressive in nature and intended to buy him out at a lower valuation. (It is right moment to let you know, In 2014 McDonald offers INR 120 crores to Mr. Bakshi for Its 50% Stake (around 145600 shares) in CPRL, but Bakshi valued his stake around INR 1800 crores, discussion remain unresolved)

In its order NCLT on 13 July 2017 reinstated Bakshi as managing director and also asked McDonald’s Corp. to refrain from interfering in the functioning of CPRL. Against this order MIPL moved to NCLAT (National Company Law Appellate Tribunal) and order is pending.

Due to problem at Board/Management level, operational disturbance is obvious. Number of new store open in 2012 was 27 but same was 3 in 2015 only in North and East India.  43 of the 55 McDonald's outlets in Delhi shut shop on June 29th due to expiry of food licences in March 2017, Although 21 out these 43 are re-opened in September 2017.

McDonald’s has been pursuing arbitration against Bakshi in London Court of International Arbitration (LCIA) since 2013 as per terms of joint venture agreement. Against which Mr. Bakshi seek stay from High Court in same year by questioning the legal validity of application to LCIA for arbitration, but court dismiss Mr. Bakshi’s appeal and said application by McDonald for arbitration at LCIA is legal.

The London Court of International Arbitration (LCIA) on 12 September 2017 ordered Bakshi to sell his stake and called for the appointment of independent experts to determine a fair value for CPRL. Against this Order Mr. Bakshi now moved to High Court.

In mean time MIPL on their end, terminating its franchise agreement with CPRL on 21 August 2017; citing non-payment of royalties as the primary reason. MIPL faces law suits from vide range of vendors, franchise owners and criticism from 10000 employees for this unilateral move; because in reality it is their fate, which is in legal battle now...