Family feud dogs Finolex Cables

Mumbai: Eight resolutions pertaining to the appointment of directors at Finolex Cables (FCL) were defeated at the Pune-based company’s annual general meeting (AGM) last week by majority shareholder Prakash Chhabria, the son of Finolex Group’s late founder Pralhad Chhabria, bringing back to centre stage an ongoing feud in the Chhabria family.The resolutions were moved by Prakash Chhabria’s cousin and current FCL executive chairman Deepak Chhabria.The cousins have been at odds over, among other things, the continuation of Deepak Chhabria as executive chairman of FCL, with Prakash Chhabria filing an application in the Bombay High Court in 2018 raising question marks over Deepak’s continuance in the post.While filing the statutory disclosure of the AGM’s voting results to the stock exchanges, FCL said that Orbit Electricals and Finolex Industries (FIL) — owned by Prakash Chhabria and together holding 45 per cent stake in FCL — were under his control and that was the reason why the resolutions were defeated.FCL said the negative votes were cast contrary to the mandate of their constitutional documents and contractual commitments.“In view of the aforesaid cases pending before various Courts/NCLT, a contention has been raised that these votes were casted by Orbit and FIL, contrary to the mandate under their constitutional documents/contractual commitments, and these are the subject matter of challenge before the Court(s) and the matter is thus sub-judice,” FCL said in the exchange filing.Countering FCL’s submission, Orbit Electricals filed a complaint with markets regulator Securities and Exchange Board of India (Sebi) and the stock exchanges on Sunday.In the complaint, Orbit said, “The additional submissions over and above the mandated statutory requirement by FCL has been made to colour the bona fide outcome of the voting results and mislead the stakeholders of FCL through such unverified and unsubstantial representations to the stock exchanges by way of disclosures.”The Orbit letter alleged that this is not only fraud against all the stakeholders but criminal breach of trust by Deepak Chhabria and the company secretary. Orbit added that certain statements pertaining to historical references of Prakash Chhabria’s personal disputes pertaining to the ongoing legal proceedings were false and malicious, and an attempt to mislead the system by levelling baseless allegations and suppressing material facts.Orbit also accused FCL of covering up the wrongdoings of Deepak Chhabria. “It is apparent that Deepak Chhabria is using the FCL filings as a cover to hide his wrongdoings and spread his malicious propaganda in the garb of making unsubstantiated regulatory disclosures, even though he has not been able to secure any relief in the legal proceedings till date,” the letter read.When contacted, Prakash Chhabria declined to comment saying the matter was before the courts, while Deepak Chhabria did not respond to ET’s queries till press time Sunday.According to FCL, in terms of a succession planning put in place earlier, the Articles of Association (AoA) of Orbit Electricals had authorised Deepak Chhabria to represent and vote at FCL's AGM on behalf of Orbit, but Prakash Chhabria had in 2019 modified the AoA and authorised another representative.

from Economic Times https://ift.tt/3iwzWZE