Pharmaceuticals and crop protection firm Hikal Ltd on Thursday refuted allegations by proxy advisory firm InGovern Research Services that the battle between its two promoters is impacting corporate performance.
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.
InGovern in a note to shareholders had 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.
In a detailed response to points raised by InGovern, Hikal said, "The document is 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."
It asserted that the Hiremath family is the promoter of the company, and InGovern's report "has been made with a view to speculate about and spread false information about the impact of the ongoing legal dispute between them on the company's performance".
On the call for separation of management from its ownership, and overhauling of the the board due to the long serving tenure of several independent directors and ageing board, Hikal said it was "premature, unnecessary, and counter-productive" while asserting the company has "significantly benefited from the continuity, experience, and the qualifications of the existing board".
The company also refuted allegations regarding moribund sales growth and decreasing operating profits and net profits.
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Hikal reiterated that "the current legal suit between the Hiremath family and the BNK family is at a shareholder level, and this suit is not expected to cause any impact to the company and its performance".
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