group’s Chhabria family feud has worsened with Prakash Chhabria, son of late Prahlad Chhabria, founder of the Pune-based Rs 15,000 crore Finolex group, has moved the Bombay High Court, questioning the continuance of
as executive chairman of
According to a copy of the civil application reviewed by ET, Prakash has asked the high court to pass an injunction to restrain his cousin Deepak from ‘acting as executive chairman of Finolex Cables’. The matter will be heard on April 4.
Prakash, who is the promoter of Finolex Cables and its largest shareholder, has alleged that in the last AGM held on September 25, 2018, Deepak didn’t follow the mandate stipulated by the board resolution passed by promoter entity Orbit Electricals.
In an emailed response, Prakash said he has filed an application before the high court, inter-alia seeking to restrain Deepak from continuing as executive chairman as he has breached the mandate of the majority shareholders. “I will not be able to comment further as the matter is sub-judice.”
Deepak too declined to comment. “I am unable to respond to your questions as the matter is sub-judice and pending before the competent courts and tribunals.”
BSE shareholding pattern shows that Orbit Electricals holds 32% stake in Finolex Cables and is currently being controlled by Prakash. Besides this, Prakash-owned Finolex Industries holds 15% in Finolex Cables. Prakash holds nearly 78% stake in Orbit Electricals while Deepak owns 8%.
Trouble started at the AGM on September 25, 2018, where the re-appointment of Deepak came up. Prakash has alleged that Deepak, as an authorized representative of Orbit Electricals, was instructed to vote against his re-appointment, but he did the opposite, thereby allegedly acting contrary to the instructions.
Prakash’s move comes after an appeal was filed by Deepak in the Bombay High Court against an order passed by the Pune District Court on September 19, 2018, wherein it had sought protection to his appointment as an executive chairman and whole-time director of Finolex Cables.
Mutual funds hold close to 19% stake in Finolex Cables. According to voting results, financial institutions comprising Tata Mutual Fund, DSP MF, Taurus MF and Union MF voted against the resolution on re-appointment of Deepak while mutual funds such as Aditya Birla SunLife, L&T MF, ICICI Prudential and Mahindra abstained from voting. Funds such as Mireae, IDBI, HSBC and Franklin Templeton voted in favour of the resolution, citing past satisfactory performance and continuity.
Most of the mutual funds which opposed the re-appointment of Deepak said that the re-appointment will increase the prevailing animosity between the two factions which could impact the company.