Shareholders of pharmaceuticals and crop protection firm Hikal Ltd have rejected a special resolution seeking continuation of Baba N Kalyani as a director of the firm after he attains 75 years of age on January 7, 2024, according to a regulatory filing by the company.
The development comes at a time when Kalyani, the Chairman and Managing Director of Bharat Forge, is locked in a legal battle with his sister Sugandha Hiremath for the ownership of Hikal.
The company had sought approval through a postal ballot from the shareholders to approve a special resolution for the continuation of directorship of Kalyani beyond the age of 75 years.
However, as per the regulatory filing by Hikal, only 51.99 per cent of votes were polled in favour of the resolution and 48 per cent were against it.
Being a special resolution, it needed 75 per cent of total votes in favour as per regulations.
Hikal is in the midst of a battle between two promoter groups - the Hiremaths who own 34.84 per cent stake and Baba N Kalyani (BNK)-led side that holds 34.01 per cent of the company. Minority shareholders own 31.15 per cent.
As per the voting results shared on BSE by the company, 49.4 per cent of promoters votes were polled in favour of the resolution and 50.59 per cent against.
On the other hand, 72.85 per cent of public institutions votes were in favour and 27.14 per cent were polled against the resolution. As for public shareholders, 57.24 per cent votes were in favour and 42.75 per cent were against the resolution.
Kalyani was first appointed as director of Hikal on February 5, 1992.
In May this year, proxy advisory firm InGovern Research Services had stated that the battle between its two promoters was impacting corporate performance and stated that in the absence of an agreement between the two warring promoter groups due the proportion of shareholding makes it difficult for any special resolution to be passed.
It was also likely to slow down decision-making and resultantly, the interest of the company is likely to be compromised.
However, the company had refuted the allegations saying it was "a one-sided and an ill-informed attempt to damage the credibility of the company and its management and has been made with the intention of causing gross prejudice to the company".
Hikal had also asserted that the Hiremath family is the promoter of the company, and InGovern's report "has been made with a view to speculate...and spread false information about the impact of the ongoing legal dispute between them on the company's performance".
The company had also reiterated that the current legal suit between the Hiremath family and the BNK family was at a shareholder level and it was not expected to cause any impact to the company and its performance.