Bengaluru: Investors vote for referring United Spirits to BIFR

Bengaluru, Jan 23 (IANS) Most of United Spirits Ltd’s (USL) investors had voted in favour of reporting to BIFR its ‘sick’ status due to net worth erosion, the company said on Saturday after a resolution was moved at an extraordinary general meeting (EGM) here a day before.

In a regulatory filing to the Bombay Stock Exchange (BSE), the liquor major said 99.9 percent of shareholders voted in favour of the resolution, seeking approval to declare the company’s net worth erosion due to huge accumulated losses.

“Of total votes polled through electronic system and secret ballot, 416 or 99.9 percent voted in favour of the resolution and 21 or 0.1 percent against, while 37 votes were invalid,” company secretary V. Ramachandran said in the filing.

Net worth is the value of a company’s assets excluding liabilities, but including its debt portion.

“The company made an operating profit of Rs.154.26 crore and had a positive net worth of Rs.845.84 crore in fiscal 2014-15. Losses were due to exceptional and non-recurring items,” the secretary claimed in the filing.

As the net worth declined to Rs.846 crore for fiscal 2014-15 owing to a whopping Rs.5,045 crore accumulated losses, the board had decided to report the erosion to BIFR as required under section 23 of the SICA, 1985.

The city-based company informed the BSE on December 29 about the EGM to seek the approval for declaring itself sick due to erosion of its net worth during the last four fiscal years, as decided by its board on December 22.

In a statement later, the company said it had reported profit increasing its net worth to Rs.1,667 crore on better performance during the first six months (April-September) of this fiscal (2015-16).

USL is the Indian subsidiary of the London-based British liquor major Diageo plc after it acquired majority stake (54.7 percent) from Mallya-controlled United Breweries Holdings Ltd and public stock in the open market.

In the absence of liquor baron and company’s chairman Vijay Mallya and full time directors, non-executive independent director D. Sivanandan chaired the EGM.

Blaming the Diageo-led new management for the net worth erosion, veteran shareholders wanted the board to fix accountability and hasten the recovery process.

Leave a Reply

Please enter your comment!

The opinions, views, and thoughts expressed by the readers and those providing comments are theirs alone and do not reflect the opinions of www.mangalorean.com or any employee thereof. www.mangalorean.com is not responsible for the accuracy of any of the information supplied by the readers. Responsibility for the content of comments belongs to the commenter alone.  

We request the readers to refrain from posting defamatory, inflammatory comments and not indulge in personal attacks. However, it is obligatory on the part of www.mangalorean.com to provide the IP address and other details of senders of such comments to the concerned authorities upon their request.

Hence we request all our readers to help us to delete comments that do not follow these guidelines by informing us at  info@mangalorean.com. Lets work together to keep the comments clean and worthful, thereby make a difference in the community.

Please enter your name here