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In a possible succession planning exercise, pharma giant Cipla’s promoter family has proposed to vote together as a single unit under overall direction of patriarch Yusuf Hamied in his lifetime, and under his brother Mustafa Hamied thereafter.
After the demise of both the brothers, or both of them being incapacitated, the family would continue to act as a single unit under the “overall direction and supervision” of a family member owning the highest number of shares.
Interestingly, the ‘family agreement’, which was made public today by SEBI, also provides that Kamil Hamied, son of Mustafa Hamied, would be deemed as representative of the existing main promoter Yusuf Hamied in the current scenario if neither of the two brothers is able to attend a shareholder meeting for any reason. There have been speculations in the past that Y K Hamied, who hanged his boots as Managing Director in March 2013, is grooming his nephew Kamil as the next leader at the home-grown pharmaceutical giant. Currently, Y K Hamied and M K Hamied are non-executive directors and the operations of the company are run by a professional management team.
The ‘agreement’ has been made public by SEBI in relation to an ‘interpretative letter’ requested by Y K Hamied about whether the “voluntary and consensual family understanding” involving the arrangement of voting rights would trigger an open offer for the minority shareholders of the company.
There were no replies to specific queries made to Cipla and Hamied himself, including on whether the ‘agreement’ has already been signed and if it was part of succession planning.
SEBI has opined that the proposed arrangement would qualify for exemptions from open offer.
Hamied further told SEBI that historically no proxies were executed among individual family members, except that Sophie Ahmed (his sister) whould execute a proxy in his favour. The Agreement also provides for a “preemptive right in case the shareholders choose to transfer their shares”, he added. All promoters put together hold 36.8 per cent stake in Cipla, while Y K Hamied individually owns 15.55 per cent. His sister Sophie holds over 5 per cent stake.
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