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Chhabria's non-retiring status, accounts -- FI nominees in SWC seek poll

Our Bureau

CALCUTTA, March 30

Representatives of FIs on the board of Shaw Wallace & Company Ltd (SWC) today sought polls on two resolutions _ one pertaining to accounts and the other to designating Mr. M.R. Chhabria as a director ``not liable to retire by rotation'' _ at SWC's 53rd A GM held here today.

FIs together hold about 25 per cent of SWC's equity, while Mr. Chhabria, directly and indirectly, controls over 50 per cent. The result of the poll is expected to be announced tomorrow. It is, however, certain that both resolutions, which are ordinary in nature, will be passed by a simple majority.

Interestingly, a similar resolution pertaining to Ms. Komal C Wazir, Mr. Chhabria's daughter, which was put to vote, was not objected to by FIs, and was passed.

FIs opposed the company's ordinary resolution to adopt the balance sheet as on June 30, 1999, and profit & loss account for the year ended as on that date, and the reports of auditors and directors.

The second resolution, which related to Mr. Chhabria, Chairman of SWC, was in the context of the board's decision of February 27 to designate him as a director not liable to retire by rotation. It may be mentioned that according to Section 255 of the Com panies Act, one-third of the total number of directors of a public company can be non-retiring directors.

SWC, according to Mr. P.L. Narasimhan, ED, who chaired the AGM, is aiming at a ``thin'' corporate structure, devoid of many subsidiaries and made up of two jumbo divisions, one each for liquor and breweries. It will also undertake a brand valuation exer cise in accordance with the business recast plan.

SWC has already embarked on consolidation, and is currently finalising merger of six companies with itself. It will shortly convene an EGM for the purpose.

A brand valuation strategy will be cobbled together. While SWC has never formally valued its brands, their value stands at over Rs. 2,500 crores on a conservative basis, Mr. Narasimhan said. A brand valuer, with international reputation, is to be engaged for this purpose.

Mr. Narasimhan said SWC's ICD exposure had been curtailed and the number of creditors had decreased to 179 (outstanding principal: Rs. 140 crores). It has filed a fresh scheme of compromise/arrangement with the Calcutta High Court. An amount of Rs. 106 c rores is now available with the officers appointed by the court in an escrow account for disbursement to the creditors once the scheme is sanctioned.

Earlier, in his address to shareholders, he mentioned that the liquor and beer businesses have seen consolidation in the recent past. Business increased by 22 per cent in both cases. Even the non-core businesses (like gelatines) have shown improvement.

Meanwhile, workers at SWC's Bhadrakhali unit have resorted to an industrial action programme in protest against the management's introduction of productivity-linked wages. They chose the AGM day to air their demands. Workers organised a sit-in demonstrat ion at Bengal Distillery.