The Supreme Court has permitted Orbit Electricals to vote in Finolex Cables’ AGM, even though the result of one resolution would be kept in abeyance till the National Company Law Appellate Tribunal (NCLAT) gives its final order.
The order, dated September 26, comes ahead of Finolex Cables’ – which is embroiled in a bitter family dispute – AGM convened on Friday.
The apex court has now vacated a stay given by NCLAT earlier.
“Any action, which is taken on proposed resolution no 4 pertaining to the appointment of the executive chairperson shall be subject to the outcome of the appeal which is pending before NCLAT,” it said in its order.
Orbit Electricals holds 30.7% stake in Finolex Cables, while Finolex Industries holds 14.51% in Finolex Cables.
Prakash Chhabria, son of late Prahlad Chhabria, is the biggest shareholder of Orbit Electricals and Deepak Chhabria – his cousin – is Finolex Cables’ executive chairman. The cousins – Prakash and Deepak – are fighting to gain control of Finolex Cables.
Prakash Chhabria owns about 78% of Orbit Electricals, while KP Chhabria faction (father of Deepak Chhabria) along with his children owns about 7%.
The dispute dates back to 2016, when allegations were levelled against Orbit Electricals’ director Prakash Chhabria and other directors by his cousin and MD of Finolex Cables Deepak Chhabria. In the board meeting, group founder Pralhad Chhabria allegedly transferred the controlling stake to his son Prakash Chhabria through a gift deed.
Brothers Pralhad Chhabria and Kishandas Chhabria emigrated from Karachi to Pune in 1945 and had set up an electrical cables shop, and later diversified into other ventures. Pralhad Chhabria, founder chairman of the Finolex Group, passed away in 2016.
Earlier proxy advisory firm InGovern Research Services recommended shareholders of Finolex Cables to “defer” two resolutions, including reappointment of Deepak Chhabria as executive chairman for a five-year term. It also sought deferring payment of commission to non-executive directors. On its part, Finolex Cables termed the suggestions “biased”.
However, another proxy advisory firm, Institutional Investor Advisory Services (IiAS), green-lighted all of the company’s six resolutions, which included adoption of financial statements, declaring of final dividend of Rs 7 per share and reappointment of directors.