Shareholders take Century Textiles to task

MUMBAI, AUG 9: Yet another Indian corporate, Century Textiles, was attacked by the shareholders for its sagging performance at the annual ...

MUMBAI, AUG 9: Yet another Indian corporate, Century Textiles, was attacked by the shareholders for its sagging performance at the annual general meeting AGM held here today. The wrath of the shareholders was so intense that the company8217;s 8 resolutions including the re-election of company8217;s chairman B K Birla, directors S K Birla and C K Birla were put to vote.

Shareholders were angry due to rising losses of the company and its lacklustre performance on the stock markets. Even S K Birla, doyen of Indian industry, failed to pacify the shareholders and was asked by the shareholders to put his re-election for voting. Even the adoption of accounts and payment of dividend was put to vote.

The restlessness of the shareholders could be gauged by the fact that this is the first time shareholders decided to ask questions on the performance of the company which has in the recent years failed to create any shareholders wealth.

Shareholders demanded that the company8217;s should sell off its Manikgarh cement unit and buy back the shares from them at an attractive price. S K Birla, who was chairing the meeting on behalf of B K Birla, said all the suggestions made by the shareholders would be put before the board of directors.

Analysts say the company8217;s textile division was not faring well better due to worldwide recession. It is also finding the going tough as its operating costs account for about 90 per cent of sales. Thus although the first half results show a rise in sales, a higher increase in expenditure has led to losses at the same level as last year.

Andersen Consulting, which was roped in to suggest a recovery path, has advised the company to initiate steps to reduce the cost of power at its cement division. Without any captive power capacity, analysts say, the company is left with no option but to bring down its per tonne power consumption.

In order to reduce costs, the company had put its Manikgarh cement unit including the power plant on block. Transnationals Blue Circle and Lafarge are in the race to acquire Manikgarh cement, a 1.5 million tonne unit of Mumbai-based Century Textiles. The Birlas have reportedly appointed I-Sec to identify a buyer for the cement unit.