Irate Shareholders Put An End To Whirlpool Agm
Irate shareholders of Whirlpool of India yesterday stalled proceedings at the annual general meeting (AGM), forcing the company to adjourn it by a day. The decision to reconvene was taken soon after a section of the shareholders got belligerent as the chairman J R Desai called for passing of resolutions.
This was the first AGM of Whirlpool India, formed last year by merging Whirlpool Washing Machines and Expo Machinery with Kelvinator of India.
Trouble broke out when the chairman invited the shareholders, after his speech, to address the gathering. A section of the crowd immediately began heckling, booing and clapping.
One shareholder cried out, "these are company's stooges". "Where are the gifts?" shouted some others.
The chairman explained that the government had declared gifts illegal. But, a few shareholders scoffed and retorted, "but Nestle just gave out gifts".
Some other investors lamented: "They have got the share prices to fall from Rs 200 to Rs 40. We cannot even sell out."
Their complaints, however, went unheard in the melee that ensued, threatening to break out into a free for all. Security forces encircled the dais on which the directors were seated and helped the senior executives make a quiet exit.
The company's management in a statement told Business Standard: "It is regrettable that a small group of less than 10 share holders or their proxies disrupted this morning's AGM.
Management feels that while it is committed to building shareholder value in the long run, appeasements in the form of gifts do not contribute in any significant measure to this objective".
The resolutions to be passed at the AGM included increasing the company's borrowing limits to Rs 500 crore.
The meeting was also to take up a related resolution to allow the board of directors to create a charge on the property of the company in favour of lenders. The move would have helped the company to repay loans raised to meet capital expenditure for an amount not more than Rs 500 crore.
Kelvinator of India's share was trading at around Rs 230 in September 1994. Although the company had shown profits during 1993-94, its marketing subsidiary had declared a huge loss.
It did not show up in the parent company's profit and loss account because the company law does not require a firm to consolidate a subsidiary's balance sheets in its books.
However, while announcing the results for the 15-month period ending September 1994-95, the new Whirlpool management decided to make the transcations with its subsidiary transparent. The company reported a loss of Rs 36.73 crore for the period.
The share price consequently crashed to Rs 80.50 in September 1995.
For the 15-month period ended December 1996, the company reported a net loss of Rs 64.82 crore. The stock price plunged to a new low of Rs 25 in April 1997, but is since trading at about Rs 40.
The losses have been arrived at after capitalising expenses such as the voluntary retirement scheme of Rs 47.55 crore.