Demanding the ouster of Aso, the shareholders threatened to move Sebi and the Company Law Board to get their grievances addressed and demanded that shares held by them be bought back by the promoters, if the company wants to run the show without taking into account the minority shareholders' interests.
The shareholders also demanded scrapping of payment of royalty to Panasonic. They also decried the shifting of imported products business to Panasonic India. Japan electronic major Panasonic Corporation has close to 56% stake in Panasonic Appliances India Company, the joint venture company with Indian partner Obul Reddy Group.
The company which posted a loss of close to R13 crore last fiscal, however, brushed aside the allegations and attributed the loss to the market conditions. The reduction in selling price drastically to take on Chinese products, frequent strike and bandhs due to Telangana agitation in the peak festival season that affected the Andhra Pradesh market , the major market of the cooker manufactured by the company were the main reasons for posting losses, according to the company.
Detailing the reasons, H Aso told shareholders that the cyclone in Chennai and Puducherry in January had impacted New Year sales season. While the free mixer grinder scheme launched by the Tamil Nadu government affected the company's mixer sales, the cost increase due to damage caused by flood in Thailand had to absorbed.
These units supply certain critical components to Panasonic Appliances, which is headquartered in Tamil Nadu. The company also had to bear the high burden of overhead / fixed cost due to discontinuation of imported products business. Also, delay in integration of sales and marketing functions with Panasonic India resulted in retention of higher fixed cost, he said.
Aso explained to the shareholders the electric cooker market scenario and the intense competition faced by the company from Chinese products. He said that the company has formulated a seven-step action plan for the revival which includes, reduction of fixed cost, renewal of production line-up, scaling up of mixie business, re-inforcement of Tamil Nadu market , enhancement of export market, introduction of new products and renovation of factory.
The shareholders, however, suggested a five-point agenda for implementation by the management, which they thing will help the company to turnaround. These include : Panasonic should wave royalty and brand licence fee for three years and should not charge any royalty until the company makes profit, immediate introduction of new profitable products and speed up production of induction cook top, payment of R10.4 crore as compensation for shifting imported goods business from the company, removal of Aso as managing director and appointment of new person who is capable of turning around the company and infusion of further capital by speeding up the proposal of convertible debenture issue.
Matsui, who represented Panasonic Corporation told the shareholders that the company is really important to the Japan major and it doesn't want Panasonic Appliances India to become a sick company. It will support the company to bring its business back to profitability.