TIL asset sale cleared despite protest

Voting numbers showed some institutions voted against the proposal

The proposal by Kolkata-based TIL (formerly Tractors India) to sell its profit making Caterpillar dealership business was cleared by the company's shareholders with about 16.62 per cent of the votes going against it.

Proxy firms had recommended a vote against the plan due to lack of transparency and conflict of interest.

According to voting data reported to the exchanges, a little over 7 million votes were polled out of the 10 million outstanding shares, through e-voting and postal ballot.

About 5.89 million or 83.38 per cent of the votes belonging to 115 shareholders went in favour of the proposal. 16 promoter group shareholders own 5.64 million shares in the company. 21 shareholders holding 1.17 million shares voted against the plan. LIC holds 1.04 million shares or 10.38 per cent.

18 other institutional shareholders including Oriental Insurance and General Insurance together held around 4.2 per cent in the company. The remaining holding is distributed among thousands of small shareholders. Given the small number of shareholders participating in the vote, it is clear that some institutions voted against the proposal.

TIL has been carrying on business of dealership of products of Caterpillar Inc., USA for the last six decades in North and East India, Nepal and Bhutan. It has been dealing in Caterpillar's earthmoving, construction and mining equipment, spares, etc., and providing related services through its following wholly owned subsidiaries, namely, Tractors India Private Limited (TIPL), India; Tractors Nepal Private Limited (TNPL), Nepal and TIL Overseas Pte. Limited (TILO), Singapore.

While TIL itself reported a net loss of Rs 29 crore, TIPL is the part of the business that earned the company a significant profit of Rs 37 crore in FY 15.

TIL proposes to sell this profit making Caterpillar dealership businesses to an entity called Goodearth Minetech (GMPL) for Rs 350 crore. Sunil Kumar Chaturvedi, who is the managing director of TIPL, is also a director in Goodearth.

TIL shares gained 1 per cent on Wednesday to close at 297.05 on BSE.