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Informist, Wednesday, Aug 28, 2024

NEW DELHI – The National Company Law Appellate Tribunal today affirmed the decision of the annual general meeting of Finolex Cables Ltd in September last year to not re-appoint Deepak Chabbria as its executive chairman and wholetime director. The appellate tribunal also asked the Mumbai bench of the National Company Law Tribunal to decide on Deepak Chabbria's plea alleging "oppression" and "mismanagement" at Orbit Electricals Pvt Ltd within 6 months.

The dispute pertains to obtaining control of Finolex Cables between cousins Prakash Chabbria and Deepak Chabbria. Prakash Chabbria owns about 78% in Orbit Electricals, which in turn holds a 30.7% stake in Finolex Cables. The faction led by K.P. Chhabria--father of Deepak Chhabria along with his children--owns just about 7% in Orbit Electricals.

On Sep 27 last year, Orbit Electricals' board of directors held a meeting and after due deliberations and discussions by a majority, voted against the reappointment of Deepak Chhabria at the annual general meeting of Finolex Cables. Prakash Chhabria, who was appointed as the authorised representative of Orbit Electricals at the annual general meeting of Finolex Cables, implemented Orbit Electricals board's decision against the reappointment of Deepak Chhabria.

At the AGM, about 72.34% of the total investors voted against the re-appointment of Deepak Chhabria, and only 27.66% in its favour. Orbit Electricals moved the Supreme Court, after the scrutiniser of the annual general meeting of Finolex Cables withheld the outcome of the voting result. In a scrutiniser report dated Oct 2, the scrutiniser intentionally and deliberately withheld the results of voting, said Orbit Electricals.

In the meantime, the appellate tribunal passed an order saying that Deepak Chhabria would stay as the executive chairman and whole-time director of Finolex Cables. On this order, the appellate tribunal bench received the apex court's wrath as it had asked them to give the order after the scrutiniser had declared the result. Thereafter, the scrutiniser declared the result which said that the shareholders of Finolex Cables had rejected a resolution pertaining to the reappointment of Deepak Chhabria as the whole-time director of the company. Finally, the top court had set aside the appellate tribunal's order allowing Deepak Chhabria to continue as the executive chairman of Finolex Cables and asked them to hear the case afresh.

Today, shares of Finolex Cables ended 1.3% lower at 1,464.10 rupees on the National Stock Exchange.   End

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

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