A notice regarding the same has been issued to all the four directors — Prakash Chhabria, Deepak Chhabria, Sunil Pathak and Sanjay Asher — of Orbit, the source said.
Some of the directors are on the board of both Orbit Electricals and Finolex Industries. (Representative image)
By Rajesh Kurup
The boards of two major corporate shareholders of Finolex Cables will meet on Monday to assess the situation, after two proxy advisory firms raised corporate governance issues. The meeting comes ahead of the company’s annual general 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 source close to the development said.
Orbit Electricals holds a 30.7% stake in Finolex Cables, while Finolex Industries holds 14.5%. A notice regarding the same has been issued to all the four directors — Prakash Chhabria, Deepak Chhabria, Sunil Pathak and Sanjay Asher — of Orbit, the source said.
Similarly, notices for the meeting were also sent to all 11 directors of Finolex Industries, including Sanjay S Math, Ritu P Chhabria, Saurabh S Dhanorkar and Deepak R Parikh.
Some of the directors are on the board of both 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 issues at Finolex Cables and asked shareholders to vote against the appointment of directors. It alleged that the present board composition of Finolex Cables may be in violation of the Companies Act, Sebi listing regulations and corporate governance norms.
According to InGovern, all directors, including executive chairman DK Chhabria, should be liable for retirement by rotation. The company had appointed Chhabria as a permanent director for life, it said, adding that this is in violation of the provisions of Companies Act.
There is a dispute between the major corporate shareholders — Orbit Electricals — on stakeholding in the company, which is preventing Finolex Cables from getting the right set of directors.
On its part, Finolex Cables appoints additional directors immediately after the AGM and doesn’t call for shareholder approval through postal ballot or EGM for almost a year or till the next AGM. This results in additional directors being on the board for a year without shareholders’ approvals, InGovern alleged.
Stakeholders Empowerment Services, another proxy advisory firm, had also raised governance issues at Finolex Cables.