Calcutta, Nov 5: KD Paul, a shareholder of Shaw Wallace & Co Ltd's subsidiary Calcutta Chemical Co Ltd, moved the Calcutta high court on September 24 against the sale of the company to Henkel Spic India Ltd. He has already moved the Company Law Board bench at Calcutta and the case is still subjudice.Paul, along with two other members of his family, controls 25.77 per cent in Calchem. According to the published notice, Paul and his family members had moved the Calcutta high court and prayed for declaring the resolutions passed at the extraordinary general meeting (EGM) held on July 26, 1998, as null and void.
Shaw Wallace controls 55.39 per cent in Calchem and had proposed to hand over the management control to Henkel. Resolutions passed at the EGM included the nomination of nine directors by Henkel on Calchem's board. By virtue of his holding, Paul has the power to nominate two representatives on the Calchem board.
Paul had opposed this move alleging violation of the takeover code of the Securities &Exchange Board of India (Sebi). He had pointed out that SWC has been paid less for the sale of shares compared to the price it got for the sale of distribution rights.
On these same grounds he moved the CLB's eastern bench earlier. SWC had sold its controlling interest in Calchem for Rs 51.05 crore against which Henkel has already deposited Rs 5 crore in an escrow account.
Paul says that SWC is being paid Rs 11.80 crore towards 4,43,124 Calchem shares (55.77 per cent) at a price of Rs 266.30 per share. Henkel is to pay another Rs 2 lakh towards the preference shares. On the other hand, SWC is getting Rs 17.73 crore for the distribution rights of Calchem.
According to the notice published, Paul has prayed for --
Declaring the EGM held on July 26, 1998, as null and void; Restraining Henkel from nominating any of its directors on the board of Calchem; Declaring Calchem's sale by SWC and its associate as illegal, null and void; Passing an injunction restraining Henkel frominterfering in the management of Calchem.The published notice of November 2 has also asked any person interested in this suit to apply to the court within 15 days.
AGM likely to be stormy: Calcutta Chemical Co Ltd's annual general meeting to be held on December 18, 1998, is likely to be stormy, sources said. KD Paul, who controls 25.77 per cent stake, had opposed both the resolutions passed at the extraordinary general meeting on June 26, 1998, for handing over the management control of Calchem to the south-based Henkel Spic India Ltd. He had also unsuccessfully tried to obtain an injunction from the Company Law Board restraining the company from holding the EGM.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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