Minority shareholders of India’s largest liquor firm United Spirits have rejected as many as 9 of 12 resolutions, including some pertaining to pacts with entities connected to erstwhile promoter Vijay Mallya.
Separately, it also informed bourses that the licensing proposal for manufacture and distribution of Diageo’s Bottled in India (bulk) products in India, on which USL had sought approval through a postal ballot had failed to go through.
Shareholders at the November 28 EGM rejected approval to a loan agreement dated July 3, 2013 between BSE -1.37 % (USL) and BSE -2.73 %
They also did not approve pacts dated September 30, 2011 and December 22, 2011 between USL and and UBHL that required UBHL to sell to the firm certain immovable properties, a BSE filing said.
Other resolutions that were defeated with requisite majority include approval of a services agreement dated July 3 2013 between USL and Kingfisher Finvest India, approval of a sponsorship pact dated June 11 2013 between USL and United Racing & Bloodstock Breeders, approval of a sponsorship pact between USL and United Mohun Bagan Football Team Pvt Ltd.
Some resolutions had to get shareholders’ nod with new norms on related-party transactions coming to effect.
The three resolutions that were passed related to erosion of net-worth of the company, sales promotion agreement and trademark licence pact, according to the BSE filing.
With 127 shareholders attending the EGM and participating in polling, this could suggest institutional shareholders played an active role in rejecting some resolutions.
USL’s BSE filing said according to regulations, promoters were prohibited from voting on the resolutions. These included, Relay BV, which owns 54.78 per cent, United Breweries Holdings, Kingfisher Finvest India among others.
However, five of the promoters group entities — UB Holdings, Kingfisher Finvest India, Devi Investments, Rossi and Associates and Vittal Investments — exercised their votes in favour of a couple of resolutions at EGM. The scrutiniser invalidated the votes exercised by them.
The company said it will examine the validity of the votes exercised by these entities.
USL is now controlled by world’s largest spirits maker Diageo, which had acquired an additional 26 per cent shares in USL for Rs 11,448.91 crore in July with an aim to take its total stake in the Indian firm to 54.78 per cent.
Liquor baron Vijay Mallya has been recently re-elected as non-executive director and chairman of United Spirits.
(Edited by Joby Puthuparampil Johnson)