Industrial explosives manufacturer Solar Industries may enter the annals of India’s capital market history with its claim that 100 per cent of its retail shareholders voted for all its resolutions at the AGM of 2017, and 96.39 per cent of institutional shareholders cast their vote as well.

Experts say it is extraordinary if even 3-4 per cent of retail investors cast their vote on proposals and resolutions at AGMs.

Proxy advisory firm Shareholder Empowerment Services (SES), run by former SEBI Executive Director JN Gupta, says such claims may be ‘too good to be true’.

According to Gupta, Solar Industries’ claims cannot be true, as SES holds one share of the company and it never voted on any of the resolutions.

“One share of SES could not be material but the company’s claim, which was too good to be true, points to a large systemic issue as it is likely that the voting results submitted by the company may not be reflective of the factual position,” SES said in a report.

SES has attached a link to a disclosure by Solar Industries of its voting pattern on the BSE website. In its disclosure, Solar Industries says that non-institutional public shareholders (retail and HNI category) held 52.38 lakh shares and 99.98 per cent of them voted on the resolution.

In the institutional category, the company says 96.39 per cent of those holding over 1.69 crore shares cast their vote. Both the data points represent a record in India.

According to the SES report, while the shareholding pattern as on THE date of cut-off is not available on the stock exchange’s website, the March, June and September 2017 shareholding patterns submitted by the company indicate that there were more than 10,000 retail shareholders and all of them voted for the resolutions.

“It is a rarity thus far that 10,000 retail investors voted in any of the AGMs. SEBI must look if there was any issue with the integrity of (the) system and if voting platforms and scrutinisers were doing their job religiously,” the report said.

Claims & counter-claims

Responding to an email query from BusinessLine , Solar Industries said the 100 per cent claim represents the votes polled and not the shareholding of the company. “The ‘100 per cent shareholders’ as claimed represents shareholders who voted on the resolutions through any of the modes of voting, i.e., e-voting/ballot form or poll, and does not represent the 100 per cent shareholding of the company. The voting result shows that non-institutional public shareholders representing 52.38 lakh shares as on (the) cut-off date have voted for the resolutions and does not represent the total shares held by the non-institutional public shareholding.”

But Solar Industries said in its disclosure to the BSE that shareholders holding over 1.69 crore shares participated in the voting and those holding over 52.38 lakh in the non-institutional category participated. In this, the company declared that two shareholders having 6.1 lakh shares did not vote for a resolution.