Moneycontrol Bureau
Mangalore Chemicals and Fertilisers (MCFL) shares jumped nearly 17 percent intraday Wednesday after shareholders rejected a transaction with Zuari Agro Chemicals (ZACL).
MCFL, which became a subsidiary of Zuari Fertilisers and Chemicals in 2015, proposed to enter into certain transactions, in its ordinary course of business, relating to purchase / sale of goods, availing / rendering of services, lease of office space, transfer of resources, sales and marketing services and cost recharge to and from ZACL.
Since the value of the transactions with ZACL during the financial year 2015-16 exceeded 10 percent of the annual turnover of the company, the approval of the members was sought for the transactions entered with ZACL.
All the transactions proposed were in the ordinary course of business; hence, it is not going to impact the company and its financials in any manner.
As per the latest shareholding pattern (June 2016), promoter Zuari Fertilisers and Chemicals, the wholly-owned subsidiary of Zuari Agro Chemicals, held 53.03 percent stake in Mangalore Chemicals. Its shareholding increased from 16.47 percent to 53.03 percent in 2015 after acquisition of shares through open offer.
Kingfisher Finvest, Mcdowell Holdings and United Breweries Holdings are other promoters of the company, which have 21.98 percent shareholding in MCFL controlled by Zuari Group chairman Saroj Kumar Poddar.
Shareholders have given approval for re-appointment of Akshay Poddar as director, appointment of DA Prasanna as independent director, N Suresh Krishnan as managing director and K Prabhakar Rao as director-works while disapproved appointment of VS Venkataraman as director.
Meanwhile, MCFL appointed Ernst & Young LLP, in March 2016, to carry out forensic investigation of two deals with UB Group companies - investments of Rs 200 crore into Bangalore Beverages by way of subscription to its preference shares and various advances made by the company to United Breweries (Holdings Limited of which a sum of Rs 16.68 crore is outstanding as of March 31, 2016).
After completion of its investigations, Ernst & Young LLP, in its presentation to the board of directors in May 2016, had said, "These transactions may have involved irregularities and elements of mismanagement in the company."
At 13:05 hours IST, the scrip of Mangalore Chemicals and Fertilisers was quoting at Rs 48.05, up 7.98 percent and Zuari Agro Chemicals was at Rs 184.00, up 0.44 percent amid high volumes on the BSE.For Kapil Mehan, MD & Group CEO, Zuari Agro Chemicals interaction with CNBC-TV18, watch the accompanying video.
Posted by Sunil Shankar Matkar
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