The company’s shares recently traded at Rs 1,194, up 6.6% from the previous day’s closing. According to experts, speculators are buying the shares in anticipation of a change of guard at the corporation.
Finolex Cables shares rose more than 6% on Thursday after the Supreme Court granted Prakash Chhabria’s Orbit Electricals the right to vote at Finolex Cables’ annual general meeting (AGM) on Friday.
The company’s shares recently traded at Rs 1,194, up 6.6% from the previous day’s closing. According to experts, speculators are buying the shares in anticipation of a change of guard at the corporation.
According to The Economic Times (ET), the Supreme Court on Tuesday vacated an interim direction of the National Company Law Appellate Tribunal (NCLAT) and allowed Orbit Electricals, led by Prakash Chhabria, to vote at Finolex Cables’ annual general meeting on Friday. The Finolex Group dispute has taken a new turn as a result of this development.
The disagreement concerns the cousins Prakash and Deepak Chhabria’s executive management of Finolex Cables. The Supreme Court’s direction might exacerbate the controversy since it gives Orbit Electricals the ability to vote on the resolution questioning Deepak Chhabria’s nomination as executive chairperson.
The Supreme Court has stated that any action on Resolution No. 4 (regarding Deepak Chhabria’s nomination as executive chairperson) will be subject to the result of the case pending before the National Company Law Appellate Tribunal (NCLAT).
Orbit Electricals, led by Prakash, is the largest stakeholder in Finolex Cables, with a 30.75 percent interest.
“Given Orbit’s low shareholding, allowing it to vote could result in Deepak Chhabria’s removal as chairman of the company.” “It’s also important to look at the court rulings in this case,” stated one expert.
According to an InGovern study, certain familial arrangements, which are now being litigated, preclude the exercise of voting rights to remove Deepak from Finolex Cables and Prakash from Finolex Industries.
InGovern requested a postponement of voting on two resolutions proposed by Finolex Cables in a memo last week. These resolutions concern the re-appointment of Deepak Chhabria as executive chairman for another five years (item No 4) and the payment of non-executive director commissions (item No 6).
Finolex Cables sent out an initial notification to shareholders on September 4 – 25 days before the AGM. On September 16, however, it made a correction to the AGM notification.
“Because 13 days is a shorter notice for a significant addition to the notice in item 4, many shareholders would not have had the time to study it.” “The law requires 21 clear days from the date of the amendment notice,” InGovern wrote in a note.
InGovern has advised a ‘yes’ vote on four of the six resolutions proposed by Finolex Cables.
