The Hindu Business Line : Zandu Pharma AGM called off

Mumbai, Sept. 24 It was an empty dais without the board of directors that greeted shareholders at what was to be Zandu Pharma’s 89th Annual General Meeting, until it was dramatically called off at the last minute.

Two separate stay orders against the proceedings had been obtained against the AGM, a note pasted at the venue told shareholders.

The Court of Civil Judge (Junior Division) Garhbeta, West Midnapore (West Bengal) and the VIII Bench City Civil Court, Kolkata had passed separate ex-parte interim injunctions restraining Zandu from holding its AGM, the note explained. Both order copies were given to Zandu only on Wednesday, (the day the AGM was scheduled), the note said.

The AGM has been at the centre of the controversy, as it comes in the thick of a battle for control between promoters of Zandu and Emami. It has already been rescheduled once, from its earlier date in August.

While details were sketchy on who filed the first petition, the second petition was filed on behalf of Zandu’s shareholder Mr Rajesh Aggarwal, said his lawyer Mr Somnath Ganguli. The petition was against Zandu’s fresh agenda for the AGM that sought to bring in five new members on the board, he said. The City Civil Court has stayed the proceedings and also fixed the next date of hearing on November 5, till which time Zandu cannot hold its AGM, induct new board members or sell assets, he told Business Line. Adding to the drama, were unconfirmed reports late evening that the Calcutta High Court had vacated one of the stay orders.

Shareholders peeved

No representatives from Zandu were present at the venue for clarification, much to the annoyance of some shareholders. “Why are shareholders being made to suffer,” a shareholder said, adding that company officials needed to clarify issues.

Zandu had pursued several channels, including the Bombay High Court and the Company Law Board, to stave off predatory overtures from Kolkata-based Emami, after the latter purchased shares from the Vaidyas, who were part of Zandu co-promoter’s family. At present, Emami holds about 27.5 per cent stake in Zandu.

Shareholders were mixed in their reaction to the takeover battle that had resulted in the postponement of the AGM. Some shareholders, like Mr Shailesh Mahadevia swore by Zandu’s management. The close to 100-year old company is a heritage company, he said, adding that they should have had the first right of refusal when the Vaidyas decided to exit the company.

But Zandu’s promoters need to clarify on its loans to associate companies at seven per cent interest, the discrepancies in the published numbers and the ban on advertising against the company due to payment defaults by its advertising agency, observed Mr Arun Kejriwal, founder of advisory firm Kejriwal Research and Investment Services.

Zandu shares were down 1.64 per cent, at Rs 14,963 on the BSE.