On July 18, 2016, CEELM reported that JSK advised Ashok Leyland UEA on the ownership transfer of truck manufacturer Ashok Leyland Motors to the Czechoslovak Group.
We reached out to Abhijit Mukhopadhyay, the President (Legal) & General Counsel (Europe) at Hinduja Group, London, to find out more about this CEE-South Asian transaction.
Why did Ashok Leyland decide to transfer Avia Ashok Leyland Motors to the Czechoslovak Group?
A.M.: Transfer of shares happened because of strategic reasons. The Board of Ashok Leyland recently reviewed their global operations and took this decision purely for business and commercial reasons.
What were the main challenges of the project?
A.M.: The main challenges related to distance. While Ashok Leyland was in India, the transaction was in the Czech Republic and co-ordination was done from London. Apart from time differences, even language was a problem. Cultural differences and ways of working sometimes created delays.
What were your main learning points from facing these challenges? If you were to work on a similar deal in the future, would you manage anything differently?
A.M. Before joining Hinduja Group (the owner of Ashok Leyland), in India, I was a director, global GC and company secretary of several large multinational companies where I was involved in many JVs, M&As, and strategic alliances with global companies. So, I am used to facing challenges! The main reason for delay in this project was because most of the time we had to operate through our lawyers to interact with the other side’s lawyers and there was not much interaction between the buyer and seller at different level. This slowed down the sale process.
JSK Partner Tomas Dolezil said of the deal that: “We are delighted to assist Ashok Leyland and Ashok Leyland UAE with this rather complex and lengthy project that included not only the transfer of ownership, but also the future relationship between the parties.” What future relationship was he talking about, and how will this deal affect it?
A.M.: Although shares were transferred, there would be a business relationship between the parties irrespective of ownership transfer.
What impact will the transfer of ownership have on the production of Ashok Leyland buses and trucks, and on their sale in CEE?
A.M.: Ashok Leyland has global operations with manufacturing facilities in many countries. So it won’t have an impact.
What was your input as a GC on the matter? At what stage in the decision making process was legal involved and what were the main considerations you put forward from a legal perspective?
A.M. As GC, I was involved completely when Ashok Leyland acquired AALM a decade back. Over the years I advised AALM (and also Ashok Leyland) on AALM legal issues. I am the legal advisor of Ashok Leyland’s holding company in London where there were discussions on the performance of AALM. So since its acquisition, I have been constantly involved in AALM’s matters.
Why did you hire JSK to represent you on the deal, and how would you describe your working relationship?
A.M.: JSK was involved with our Czech company for a long time. That is why we retained them. We found them competent, knowledgeable on local laws, and cost effective, with magnificent response times. Overall, we were very happy with their performance, which continued almost for one and a half years.