Micromax’s Rahul Sharma has big reasons to worry now. His former Chairman threatens to drag him to court

Former Micromax chairman Sanjay Kapoor, who was pushed out of the company post, has threatened to take legal action against the firm and its directors.

In the wake of allegations by the company that he misappropriated fuel bills and counter-allegations by him that it had cooked up a malicious story to deny him his stock options, he was forced to resign.

His resignation letter to the Micromax board revealed the depth of the acrimony between the two parties and belies the narrative that his parting had to do with differences over strategy.

The letter dated July 27 was among documents submitted by the company to the Ministry of Corporate Affairs and uploaded on the ministry's website. It also refers to an earlier letter by Micromax promoter Rahul Sharma on July 10.

The July 10 letter from Micromax promoter Rahul Sharma terminated Kapoor's services forthwith because he presented for payment and got cleared large amounts of money towards fuel expenses. While the exact amounts were not revealed, Kapoor has in his letter denied that he ever claimed any fuel expenses and calls the entire issue a ruse to deny him his stock options.

According to him, Micromax had an arrangement with a fuel station and all bills were presented by it to the company directly and no question, therefore, arose of him presenting and getting payments cleared.

"By no stretch of imagination it can be stated that I have misappropriated any amounts as no amounts were paid to me for fuel expenses. There were no cash transactions involved," he said.

Instead, he has claimed the sole motive for the July 10 letter was to "illegally" deprive him of his stock options.

"The valuation of the company has increased due to my efforts. I have successfully got the commitment of huge investment in the company the fruits (of) which the company has already started to reap," he said in his resignation letter in which he also called his termination "arbitrary" and unreasonable.
Micromax is in the middle of a fundraising round which has now hit a roadblock.

At the time of joining Micromax in June 2014, Kapoor, a former chief executive officer of Bharti Airtel for India and South Asia, had been promised over 1% of the company in stock options.

The board of Micromax acknowledged Kapoor's resignation in a meeting held on August 1 and employee stock options issued to him were revoked the same day.

The letters show a complete breakdown in relations between Kapoor and Micromax's founders, and make clear that his exit had less to do with differences over strategic vision.

The company earlier said he had "decided to move on" and thanked him "for his contribution and wish him luck for all his future endeavors". In his resignation letter, Kapoor said he had lost faith in the company's board of directors and no self-respecting person would continue as a director in a company where "ethics and truth are not complied or adhered to".

(Image: Indiatimes)