Unitech shareholders reject dividend payment

In an unusual development, the shareholders of realty major Unitech today rejected a management proposal for payment of dividend totalling about Rs 30 crore for the fiscal 2010-11.

"Shareholders did not approve the payment of dividend and the resolution for declaration of dividend on equity shares for the financial year ended March 31, 2011 rescinded," Unitech said in a filing to the Bombay Stock Exchange (BSE).

In May, the board had recommended a dividend of Re 0.10 per equity share of face value of Rs 2 each for 2010-11 fiscal and the proposal was taken up for shareholders approval at their annual general meeting held here today.

Rarely, the shareholders at the companies' AGMs reject proposals such as dividend payment, which are taken up as 'ordinary business' resolutions.

According to company sources, the board had proposed to pay about Rs 30 crore as dividend for 2010-11 fiscal but shareholders felt that the company should rather utilise the fund for business purposes considering the current environment of high interest rate.

However, the company said that the shareholders passed other resolutions.

As on June 30, promoters have had 48.57% stake in Unitech and rest 51.43% is with public.

Unitech had reported nearly 16% decline in its consolidated net profit at Rs 567.66 crore in 2010-11 fiscal against Rs 675.05 crore in the previous year. However, net sales rose by 8.7% at Rs 3,187.09 crore in the last fiscal as against Rs 2,931.33 crore in 2009-10.