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(Un)official Minutes of S. Kumars EGM

Published on Wed, Apr 29,2015 | 19:42, Updated at Wed, Apr 29 at 19:42Source : 

S. Kumars Nationwide: The (Un)official Minutes of the EGM

IIAS Report: Shareholders witnessed an orchestrated charade at the EGM held on 27 April 2015. The group of retail shareholders that requisitioned the EGM conveniently withdrew the resolutions that called for the removal of the entire board. The existing management then magnanimously inducted the four nominees to the board, whose candidature was proposed by the very group that alleged mismanagement. Genuine investor voices were hushed – and, if this was not enough drama for one afternoon, there was an attempt to push the Kasliwal family feud onto the agenda.

From the date it was called, S. Kumars Nationwide Limited’s extra-ordinary general meeting (EGM) had the makings of a soap opera.  IiAS attended this meeting.

A group of shareholders holding 21% of S. Kumars Nationwide Limited (SKumars) had called for an EGM, held on 27 April 2015 – the resolutions comprised removing the existing board of directors and instituting a new board in its place.

The meeting commenced with the announcement that the resolutions which called for the removal of the board were withdrawn.

This raised questions about the authenticity of the allegations raised by the group that requisitioned the meeting. In a weak attempt to substantiate their action, the group calling the EGM stated that the clarifications provided by the management were sufficient to support the withdrawal. These clarifications, however, were not shared with genuinely aggrieved shareholders who took the trouble to attend the meeting.

The management then affected magnanimity and inducted the four directors to the board. These candidates were nominated by the very group that made allegations against the current board, and were meant to replace the existing management. Following a shareholders outcry, the chairperson hastily provided sketchy information regarding the new directors.

At this point, there was an attempt to bring the Kasliwal family feud onto the agenda.  A member of the divided Kasliwal family got up to accuse the existing management of wrongdoings.  Yet, like most of the irate voices that raised concerns about the ‘sham of an EGM’, his tirade too was cut short with the meeting being adjourned.

The meeting was conducted in the traditional show of hands fashion with no e-voting option provided despite it being mandatory for listed companies to do so. But, this isn’t the first time that SKumars has violated regulatory requirements.

All the questions regarding when the AGM is likely to be held, when the long overdue financial statements are likely to be published , what is the management strategy to pull the company out its current morass were ignored and remained unanswered.

Is the new board’s agenda really to fix the company or do they collectively have some other agenda?  Given the farce being played out, it’s time bankers take control and regulators step in. Retail investors need to be shielded.

The full IIAS report is attached here…

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Attachments : F2.0 IE SKumars EGM The Unofficial Minutes 29April2015.pdf

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