UTI move to stall Rossell unit sale futile

According to the results of the poll, the resolution was passed with 89.48 per cent of the votes cast in favour and 10.52 per cent against.

The EGM had two resolutions relating to the reappointment of managing director YK Modi as the executive chairman for a period of five years starting January 17, 1999, and for selling one/two tea gardens in Assam.

Modi said the company is looking for buyers for its tea gardens. The EGM notice said the resolution to sell one or two tea gardens is an enabling one.

However, company sources had earlier said the company had already sold Koilamari tea estate in Assam to a city-based trading group. Thesale price is still a closely-guarded secret. The decision to put a couple of tea estates on the block has been taken with a view to reducing the company’s debt burden which is around Rs 20 crore now.

Modi said that on February 5, UTI sent a letter to the company noting their opposition. He pointed out that: "They (UTI) are not opposed to it, they only want that we take their permission before the tabling of the resolution".

At Wednesday’s meeting, chairman Kaul said UTI had suggested that either some modifications are incorporated in the resolution or a poll be held on it. Dismissing the plea, Kaul said: "We do not think it is appropriate to amend this resolution, since like all other shareholders, they (UTI) cannot expect special privilege."

Two scrutineers were appointed for the poll — an ordinary equity shareholder GS Pandey and Rossell executive SK Ghosh.

According to Modi, he along with his associates hold around 65 per cent in Rossell Industries while UTI and General Insurance Corp hold sevenand four per cent respectively. The rest is with the public.

Lead financial institutions Industrial Development Bank of India and Industrial Investment Bank of India are debenture-holders in Rossell Industries.

At the poll, 44 ballots were cast of which three were declared invalid by managing director D Atal. According to him, the valid ballots represented 72,74,207 votes of which 65,80,724 (89.48 per cent) were cast in favour of the resolution while 7,65,483 (10.52 per cent) were cast against.

In fact, most of the minority shareholders present at the EGM were critical of the UTI stand while supporting the company’s move to sell a couple of gardens.

Rossell Industries has recorded a sales turnover of Rs 89.16 crore and net profit of Rs 8.91 crore in the 15-month period to December 31, 1997. The estimated turnover for the 12-month period to December 31, 1998 will be around Rs 85 crore on a total production of 9.66 million kg.

According to Modi, the 1998 sales turnover went up because the company hadhuge carry forward stocks from the previous year.