Basant Kumar Jhawar, chairman emeritus and a co-founder at Usha Martin, has been voted out from the board of directors by shareholders at an extraordinary general meeting (EGM).
The two factions at the apex of Usha Martin’s (one of the largest makers of wire ropes in the world and a leading speciality steel maker here), of Basant-Prashant Jhawar and Brij-Rajeev Jhawar, have been at odds with each other for a while. Each has a shareholding of 25.5 per cent.
The EGM was convened on Saturday to seek continuation of Basant Kumar Jhawar, 83, and Brij Kishore Jhawar, 81.
According to Securities and Exchange Board of India (Sebi) regulations, a non-executive director above 75 years of age may continue his term beyond March 31, 2019, if shareholders approve. However, while 99.8 per cent of the votes were for continuation of Brij Jhawar, the other promoter-director, 67.3 per cent of the votes polled were against the resolution for Basant Jhawar continuing. The rival promoter group and the entire block of public institutions voted against Basant Jhawar. A special resolution requires 75 per cent of the votes cast in favour for it to go through.
The family row peaked when Prashant Jhawar was removed as non-executive chairman in 2017 by the board. Rajeev Jhawar is the managing director. Prashant Jhawar, subsequently, had filed a petition at the high court here and before the National Company Law Tribunal against his ouster.
Questions had been raised by Basant and Prashant Jhawar on a Rs 4,500-crore deal with Tata Steel for sale of the steel business. The main contention was use of the net proceeds from the transaction and debt repayment. The transaction was aimed at clearing Usha Martin’s debt. Basant and Prashant Jhawar voted in favour of the deal.
Sources close to Basant Jhawar said Rajeev Jhawar and his group of shareholders voted against continuation of Basant Jhawar. Whereas Basant Jhawar and his group of shareholders did not oppose continuation of Brij Jhawar on the board.
They further said that the board had okayed Rs 75 crore of the Tata fund to pay exchequer dues for the Adityapur Industrial Estate. “This issue was pointed out by Basant Jhawar and the board chaired by G N Bajpai voted against Basant Jhawar’s objection. Basant Jhawar is not a director from tomorrow and will not be bound by the board members’ guidelines.”
G N Bajpai, whose term was to end in July 2019, had decided not to continue as director and non-executive chairman beyond March 31. The company had informed the stock exchanges on Thursday about Bajpai's letter.