Petition by Orbit to the Supreme Court regarding the AGM Results of Finolex 2023

Petition by Orbit to the Supreme Court regarding the AGM Results of Finolex 2023

In a recent development that has taken the corporate world by storm, Orbit Group has approached the Supreme Court challenging the results of the Annual General Meeting (AGM) of Finolex Industries Limited.

This comes in the backdrop of ongoing disputes between various stakeholders in the company. Here, we’ll delve deep into the details of the dispute, its history, and its potential implications.

Finolex Industries Limited, one of the country’s prominent PVC pipes and fittings manufacturers, has been no stranger to corporate governance issues in the past. Disagreements amongst key stakeholders have previously made headlines, but the recent AGM outcome seems to have become the flashpoint in these tensions.

Orbit Electricals, a Finolex Cables (FCL) promoter, has filed an interim case with the Supreme Court asking for guidance on how to instruct the scrutiniser to announce a resolution’s voting results. The resolution, which deals with Deepak Chhabria’s reappointment as executive chairman, has been tabled.

Orbit Electricals also charged the scrutiniser with contempt of court by hiding the results of the election in its appeal submitted this week. This violates the supreme court’s injunction from September 26, it said.

Orbit Electricals is asking the supreme court to order the scrutinizer to issue a supplemental scrutiniser report in which they announce the vote results.

The vote results for Resolution No. 4 on the reappointment of Deepak Chhabria as a full-time director designated as executive chairman have not yet been made public by FCL. The business just had its annual general meeting (AGM).Finolex Cables is owned by Orbit Electricals for 30.7% of its shares, and Finolex Industries for 14.51 %.

The major stakeholder in Orbit Electricals is Prakash Chhabria, the late Prahlad Chhabria’s son; Deepak Chhabria, a relative, is the executive chairman of Finolex Cables. Prakash and Deepak, the cousins, are squabbling over who will run Finolex Cables.

At the heart of the dispute are the results of the AGM, wherein certain resolutions were passed that did not sit well with the Orbit Group, a significant shareholder in Finolex.

The group alleges irregularities in the voting process. According to them, there were discrepancies in the electronic voting mechanism and some shareholders were allegedly kept in the dark about crucial aspects of the resolutions.

On the other hand, Finolex Industries maintains that the AGM was conducted in strict accordance with the regulatory guidelines, and all resolutions were passed with the requisite majority. They further argued that they followed all due processes in communicating the details of the resolutions to the shareholders.

Given the gravity of the allegations and the potential implications for corporate governance, the case has now reached the Supreme Court.

Orbit Group’s plea mainly revolves around the sanctity of the voting process. They’ve called for an independent audit of the electronic voting system, believing that such an audit will reveal the alleged irregularities.

Finolex is expected to rely heavily on the regulatory framework, asserting that they’ve adhered to all the guidelines set out for AGMs and electronic voting. The company might also present evidence to show that shareholders were well informed about the resolutions.

If the court were to find any merit in Orbit’s allegations, it could result in the nullification of the AGM’s results. This could further lead to fresh voting on the resolutions, potentially altering the company’s immediate strategic direction.

More broadly, this case will be closely watched by industry stakeholders as it could set a precedent in matters related to AGM conduct and electronic voting.

Depending on the outcome, regulators might be prompted to review the guidelines for conducting AGMs and the electronic voting process. This could lead to more stringent measures ensuring transparency and fairness in corporate decision-making.

The tussle between Orbit Group and Finolex Industries is not just a corporate dispute but a larger reflection on the need for robust corporate governance mechanisms in place. As the Supreme Court hears the matter, stakeholders from all sectors will be keenly awaiting the verdict, as it could shape the future landscape of corporate governance in the country.