Hiranandani wins Hirco-Laxey fight

Niranjan Hiranandani, chairman of Hirco Plc, today emerged winner in his long-drawn fight with Laxey Partners, an activist shareholder in the company which had been campaigning to remove the board of directors, including Hiranandani.

Laxey has just over 10 per cent of Hirco’s equity and had called for an extraordinary general body meeting today to remove three directors of Hirco and replace them with its own nominees. Laxey also demanded that Hirco name a chairman who was independent of the Hiranandani family.

Hiranandani said 60 per cent of the shareholders voted against Laxey’s proposals. The EGM was held in Zurich, Switzerland.

While Laxey sought removal of three directors, the other camp threatened to pull out the entire board if any of its directors were ousted.

“Laxey has done a lot of damage to the credibility of the company and we have to restore that now. We have to focus on long-term objectives and continue adding value for shareholders,” he said on telephone.

Hirco had to defer a plan for reverse takeover of the Hiranandani group companies-— Hirco Developments and Hiranandani Investment Companies — with itself, following a backlash among investors led by Laxey, which described the proposal as “shocking and ill-conceived”. Hirco claimed support of 90 per cent of the shareholders.

Laxey claimed the restructuring plan was likely to dilute their interests and effectively cede control to the Hiranandani family. After Hirco’s board approved the merger, Laxey came out with a letter that said: “No valuations for the loss-making developer, Hirco Developments, have been provided, only accounts that show it has lost money every year and has required a cash injection every year from Hiranandani.”

However, Laxey recently faced setbacks in its fight against the Hirco board after UK’s Standard Life Investments, which holds 13.7 per cent in Hirco, opposed the move and RiskMetrics Group, a leading international proxy advisory services firm, recommended Hirco shareholders vote against the resolutions.