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Calcutta, Dec 19: The Calcutta Chemical Co Ltd's (Calchem) 77th annual general meeting brought forth the difference of opinion at the board level between the two largest shareholders and the acquirer Henkel Spic India Ltd over the sale price. Although managing director PJ Rao and nominee of the largest shareholder Shaw Wallace & Co Ltd denied any board room dispute, KD Paul who holds 25.93 per cent, affirmed that there was a difference of opinion.
The company declared a dividend of 170 per cent (100 per cent interim and 70 per cent now) after a gap of 18 years. The company release claimed that it has registered a 260 per cent increase in turnover.
However, the sales turnover has actually dipped marginally to Rs 37.36 crore to March 31, 1998, against Rs 32.51 crore (Rs 39.01 crore annualised) in the ten-month period to March 31, 1997.
Manufacturer of neem-based personal-care products, the company's well-known brands are Margo soap, talcum powder, winter care lotion Tuhina, Neem toothpaste, Moloy sandalsoap, Fenoklin phenyle and Suds -- a neem soap for dogs.
Chairperson Asima Chatterjee said that factors like the south-east Asian crisis, world-wide recession and poor neem seed crop has led to increased input costs and pressure on margins. She felt that the after re-launching of Margo, the response has been satisfactory. She also pointed out that although the company's Chennai unit has received three notices from the central excise department totalling Rs 4.03 crore, the its appeal against this has been admitted. She felt that the company has a strong case.
Director TS Venkatesan told the shareholders at the AGM that the company at this current rate of profitability will be able to wipe out its accumulated loss of Rs 6.78 crore within two to three years. The company had posted a net profit of Rs 3.52 crore for the year to March 31, 1998.
After the AGM, fissures between two largest shareholders -- Shaw Wallace & Co Ltd's nominee and managing director PJ Rao and second largest shareholder KD Paul --surfaced when the directors met the reporters for briefing. While Rao maintained that there was no dispute at the board level of Calchem, Paul said that there was a difference of opinion. SWC holds 55.57 per cent while Paul holds 25.93 per cent in Calchem. The public holds 18.5 per cent.
Paul has moved the Calcutta high court appealing against the CLB order which has disposed his prayer for declaring that the price of Rs 266.30 per share, as invalid. Calchem was to be purchased for Rs 51.05 crore by Henkel, against which only Rs 5 crore has been deposited in an escrow account earlier this year.
Since Henkel has paid only Rs 11.82 crore for its total stake in Calchem while it paid Rs 17.73 crore for the distribution rights. Paul alleged that this was being done to reduce the price to be offered to the minority shareholders.
He had also opposed the induction of Henkel's directors on the board at the extra-ordinary general meeting held on June 26, 1998.
Tamal Kumar Majumdar, one of the equityshareholders wanted to know the rationale behind the induction of three new members on Calchem's board on October 24, as nominees of SWC. However, the management offered no response on this issue.
Three new directors -- KC Gupta, TS Venkatesan and T Aich -- were inducted on the board on October 24, which was ratified by the shareholders today. Out of the 12 non-executive directors, only KD Paul's nominee NN Chaudhury was absent today.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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