The ownership dispute in Hikal between Bharat Forge chairman & MD Baba Kalyani and his sister Sugandha Hiremath has taken a new turn as Baba’s 31-year-long innings as a board member at the chemical company comes to an end with a shareholder vote.
Baba has lost his board seat as he failed to secure the necessary votes needed to continue as Hikal’s non-executive, non-independent director — a requirement that arose due to his age. Baba will turn 75 on January 7, and to continue as a director, he required support from 75% of Hikal’s shareholders.
He managed to get around 52% of the votes. About 48% of Hikal shareholders who cast their vote were against his reappointment, regulatory filings showed.
His removal was expected given Sugandha’s significant stake in Hikal — about 35% as of September-end. She, as reported by TOI in its December 23 edition, voted against her brother’s continuation as a director. The resolution was defeated as it needed to be supported by 75% of the total voting. The month-long postal ballot-cum-electronic voting process ended on December 24. Overall, about 79% of Hikal shares were voted.
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About 27% of Hikal’s institutional holders who voted were against the reappointment resolution, according to the filing. Around 43% of voting shareholders, who were not promoters or institutional holders, favored Baba’s removal.
Hikal is at the center of a legal battle between the two siblings, where Sugandha has demanded that Baba transfer his share of 34% in the chemical company to her as part of a family arrangement inked in 1994. Baba has dismissed such a share-transfer clause. The matter is pending before the Bombay High Court.
Hikal is one of the leading homegrown chemical players in the country with five manufacturing facilities and a revenue of Rs 2,028 crore in FY23.
Incidentally, Baba had faced a tough time in retaining his board seat at Bharat Forge earlier this year. The majority of the institutional investors (about 54%) voted against his reappointment as MD of the industrial component maker. However, due to his dominant holding of over 45% in his group flagship, he managed to retain the board position.
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