FI demand rejected at Philips EGM poll

CALCUTTA, DEC 5: The demand raised by the financial institutions jointly has been rejected at the poll where the resolution concerning sale of Salt Lake factory by Philips India was carried by an absolute majority. The only resolution, which was forced to poll by the FIs at the end of the EGM held here yesterday, stated that the company management was permitted to sell the Salt Lake facility to Videocon International on terms and considerations as may be deemed fit by the board of directors of Philips India.

According to a company release here, the number of votes polled in favour of the resolution were 23,227,922, while only 8,725,671 votes were cast against it. The company management was able to counter the opposition raised by institutions as its foreign parent Philips of the Netherlands holds 51 per cent controlling stake in the Indian outfit. The financial institutions, including LIC, GIC and UTI, which jointly managed 21 per cent of Philips India equity, objected the manner in which the resolution wasdrafted. They demanded that the clause “subject to approval by the institutions” be incorporated in the resolution, which the company management declined to do.

The board of the Philips India had agreed to sell the factory to Videocon International, at a price of Rs nine crore. However, the employees trade unions demanded that the property be sold to them instead at a marginally higher price of Rs ten crore. The ten-member board, which was present in full strength, got heavy flak from shareholders at the EGM on Friday. Philips had proposed two resolutions — the first relating to the Salt Lake factory and the second for the sale of the Loni unit near Pune.