Fuller KCP, the Chennai-based cement machinery manufacturer, has convened an extraordinary general meeting (EGM) on April 17 to alter more than 30 Articles of Association of the company.
It has also sought shareholders' approval for the appointment of S S Sidhu as managing director for five years from September 1996.
The move comes close on the heels of the purchase of KCP's shares by Fuller International, taking up the latter's equity from 40 per cent to 80 per cent. Besides, articles conferring special rights to KCP Ltd are now sought to be deleted at the EGM.
Under the present Articles of Association, conversion of a part of long-term loan into equity by any financial institution would have resulted in the company offering Fuller a sufficient number of equity shares.
This was to ensure that Fuller's stake in the company was maintained at a minimum of 40 per cent.
Had Fuller subscribed to these additional shares, KCP Ltd, the Indian promoter, had the option to purchase additional equity so that KCP, too, continued to hold 40 per cent equity.
However, the company now seeks approval for Fuller to hold 80 per cent of equity in case a financial institution exercises the option to convert a part of any loan into equity.
Besides, KCP Ltd's right to hold an equal percentage will be scrapped.
Fuller KCP had maintained that Fuller International has the right to use the 'Fuller' trademark in India as long as it owned 40 per cent or more of the company's equity.
The company now seeks sanctions for the use of the trademark for an equity holding of 51 per cent by the US company. The EGM would seek shareholders' approval to include a clause which gives the company the right to remove the trademark in case the equity holding drops to less than the stipulated mark.
Among the major Articles sought to be changed by the company at the EGM are the percentages for quorum in terms of issued capital. At present, six members representing 65 per cent of the total issued capital of the company is quorum for a general meeting. The company now seeks to modify this to 80 per cent of the total issued capital.
KCP Ltd's right to appoint one director not liable to retire by rotation and its right to remove any such director and appoint another individual in his place will be scrapped with this EGM.
Surprisingly, the notice period required for a general body, which is 30 days, is now sought to be reduced to 21 days
Whereas Fuller had the right to appoint one director on the board of the company, who was not liable to retire by rotation, the company now seeks the appointment of two such directors on the board in keeping with its increased equity holdings.
Fuller KCP's gross sales in 1995-96 dipped to Rs 159.68 crore from Rs 173.21 crore in 1994-95. Net profit, too, dipped marginally from Rs 10.95 crore in 1994-95 to Rs 10.61 crore in 1995-96.
