Finolex Cables accuses Prakash Chhabria of ‘instigating’ actions

By: |
September 28, 2021 2:37 AM

“It is apparent that Prakash Chhabria is instigating actions against the interests of Finolex Cables, including by causing Orbit Electricals and Finolex Industries to vote against the re-appointment of longstanding and respectable directors of Finolex Cables…,” it said in a statement on Monday. This happened two years ago, last year and is happening this year too.

Finolex Cables has convened an Annual General Meeting (AGM) on September 29 to seek shareholders' approval for appointment of directors.

Finolex Cables has accused Prakash Chhabria, whose father PP Chhabria had co-founded the Finolex group, of “instigating” actions against the interests of the company. These include asking shareholders to vote against the re-appointment of the company’s directors.

“It is apparent that Prakash Chhabria is instigating actions against the interests of Finolex Cables, including by causing Orbit Electricals and Finolex Industries to vote against the re-appointment of longstanding and respectable directors of Finolex Cables…,” it said in a statement on Monday. This happened two years ago, last year and is happening this year too.

The statement was signed by Finolex Cables chief executive officer Mahesh Viswanathan. The company is in compliance with the law and requisite standards of corporate governance, it said, adding that “no heed be given to the false and speculative rumours”.

Finolex Cables has convened an Annual General Meeting (AGM) on September 29 to seek shareholders’ approval for appointment of directors.

Prakash Chhabria, a cousin of Finolex Cables chairman Deepak Chhabria, is a director of Orbit Electricals and the executive chairman of Finolex Industries. Orbit Electricals holds a 30.7% stake in Finolex Cables, while that of Finolex Industries is 14.5%.

Reacting to various reports of corporate governance issues at Finolex Cables, the company said civil litigations have been pending in courts since November 2016. Two FIRs were earlier filed in Pune against Prakash Chhabria and others, and investigations are ongoing in both, it added.

“In these litigations a question in issue is regarding the purported gift of a majority of shares of the family holding company Orbit Electricals by P.P. Chhabria to Prakash Chhabria, shortly before P.P. Chhabria passed away, after having left several documents recording how the shares standing in his name in Orbit were to be dealt with,” the statement said.

Finolex Cables also added that it was not appropriate to comment on matters that were sub-judice.

Last week, proxy advisory firm InGovern Research Services had raised governance issues at Finolex Cables and asked shareholders to vote against the appointment of directors. It had alleged that the present board composition of Finolex Cables may be in violation of the Companies Act, SEBI listing regulations and corporate governance norms.

There is an ongoing dispute between the major corporate shareholders – Orbit Electricals — on stake holding in the company, which is preventing Finolex Cables from getting the right set of directors, it added.

Stakeholders Empowerment Services, another proxy advisory firm, had also raised governance issues at Finolex Cables.

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