By Rajesh Kurup
The boards of two main corporate shareholders of Finolex Cables will meet on Monday to assess the predicament, following two proxy advisory firms raised corporate governance difficulties. The meeting comes ahead of the company’s annual common meeting (AGM) slated for September 29.
“The boards of Orbit Electricals and Finolex Industries would meet on Monday mainly to discuss the issues and authorise directors to cast votes on behalf of the company. Importantly, a decision on whether to support or reject the resolutions would also be taken at the meeting,” a supply close to the development stated.
Orbit Electricals holds a 30.7% stake in Finolex Cables, when Finolex Industries holds 14.5%. A notice concerning the exact same has been issued to all the 4 directors — Prakash Chhabria, Deepak Chhabria, Sunil Pathak and Sanjay Asher — of Orbit, the supply stated.
Similarly, notices for the meeting have been also sent to all 11 directors of Finolex Industries, such as Sanjay S Math, Ritu P Chhabria, Saurabh S Dhanorkar and Deepak R Parikh.
Some of the directors are on the board of each Orbit Electricals and Finolex Industries. Deepak Chhabria is also a member of the Finolex Cables’ board.
Last week, proxy advisory firm InGovern Research Services raised governance difficulties at Finolex Cables and asked shareholders to vote against the appointment of directors. It alleged that the present board composition of Finolex Cables may possibly be in violation of the Companies Act, Sebi listing regulations and corporate governance norms.
According to InGovern, all directors, such as executive chairman DK Chhabria, must be liable for retirement by rotation. The corporation had appointed Chhabria as a permanent director for life, it stated, adding that this is in violation of the provisions of Companies Act.
There is a dispute among the main corporate shareholders — Orbit Electricals — on stakeholding in the corporation, which is stopping Finolex Cables from having the suitable set of directors.
On its component, Finolex Cables appoints further directors right away following the AGM and does not contact for shareholder approval by way of postal ballot or EGM for practically a year or till the next AGM. This benefits in further directors becoming on the board for a year with no shareholders’ approvals, InGovern alleged.
Stakeholders Empowerment Services, a different proxy advisory firm, had also raised governance difficulties at Finolex Cables.