Fis See No Face-Off With Manu Chhabria

Financial institutions, which recently renominated P K Pandit to represent them on the Shaw Wallace and Co (SWC) board, do not see a major faceoff brewing with the M R Chhabria group.

Pandit was voted out at the company's last annual general meeting in a surprise flexing of muscles by Chhabria and his group. While corporate circles are abuzz with speculation about what the next course of action would be from the Chhabria camp now that Pandit is once again the FIs choice, the institutions see no real problem cropping up in the coming days. Says a top institutional source: "There is no major problem between Pandit and the company's promoters. This was a corporate democracy issue."

 

The FIs explain they renominated Pandit since he was on the board of the company and knew its working. "He is our nominee. So we want him to be there.''

Sources close to the company concede that the issue is purely one of shareholders' rights and corporate democracy. The Company Law Board (CLB) also recently went into the issue and ruled that the institutions would have to nominate their representative within ten days and the nominee would have to regularly attend all board meetings of the company. SWC-watchers are talking of two possibilities -- either an escalation of the faceoff between Chhabria camp and theFIs following renomination of Pandit, or return to peace, since the promoter group has extracted sweet revenge and proved its point by throwing out Pandit in the first place.

The FIs had, in the previous AGM, voted against the reappointment of Chhabria on the board. While the Chhabria camp voted against Pandit, the FIs are also believed to have voted against the adoption of accounts. The FIs now seem to feel that since the honours are even at this point in the Chhabria-FIs battle, no further hostilities would be seen in the coming days.

"The issue was whether the voting rights of the promoters remain. Besides, the management wants to proceed in a certain path and exercise its democratic rights," sources pointed out.

While the move by the FIs to bring Pandit back is being seen as one which helps save face for FIs, all eyes are now on the Chhabria camp to see what steps it takes next. SWC is, however, also moving court opposing the CLB order.