Following the removal of Deepak Chhabria, the fight for the control of Finolex Cables is expected to intensify, with estranged cousin Prakash Chhabria intending to stake claim to the post.
Shares of Finolex Cables gained 1.47% to Rs 933.35 on Friday.
ET BureauIn an exchange filing, the company said that Deepak Chhabria ceased to be wholetime director designated as “executive chairman” of the company with effect from October 16, 2023.
“Further, we wish to inform you that the board, at its meeting held today, appointed Nikhil Naik, non-executive director of the company, as chairman of the board with immediate effect and until the conclusion of the next annual general meeting of the company.
In the last AGM held on September 29, shareholders of Finolex Cables had rejected a resolution pertaining to the reappointment of Deepak Chhabria as a wholetime director designated as executive chairman. About 72.34% of the total investors had voted against the resolution, while 27.66% supported it. Significantly, 93.21% of the promoters opposed Chhabria’s reappointment. In contrast, 64.38% of institutional investors favoured the resolution.
The company did not disclose the voting results. Hence, Prakash Chhabria-led Orbit Electricals took the matter to the Supreme Court, contesting the non-disclosure. A Supreme Court bench led by Chief Justice DY Chandrachud on October 13 ordered scrutiniser VM Birajdar to disclose the results immediately and said the National Company Law Appellate Tribunal (NCLAT) can pronounce the judgment later. However, on October 13, NCLAT pronounced the order first, and the scrutiniser disclosed the voting results later.
Miffed by the development, the Supreme Court on October 18 issued notices to two members of the National Company Law Appellate Tribunal (NCLAT) to show cause for not initiating contempt proceedings against them for delivering a judgment in violation of a status quo order passed by the Supreme Court.
Orbit Electricals holds a 30.7% stake in Finolex Cables. Prakash Chhabria holds 20% in Finolex Cables through Finolex Industries and direct stakes in Finolex Cables individually and through family members. Prakash Chhabria owns about 78% of Orbit Electricals, while KP Chhabria faction (father of Deepak Chhabria) and his children own about 7%.
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