Wockhardt shareholders reject resolution on related party transaction
New Delhi: Shareholders of pharma firm Wockhardt Ltd have rejected a resolution on a related party transaction that seeks to allow the company to raise up to Rs 1,600 crore from its promoter group firm Khorakiwala Holdings and Investments Pvt Ltd. At the company's annual general meeting held on August 14, the company had put ten resolutions, including the adoption of audited financial statements and the re-appointment of Murtaza Khorakiwala as Managing Director, for approval by the shareholders, all of which were approved except the related party transaction.
All the resolutions mentioned in the notice of the 24th annual general meeting stand passed with the requisite majority except Resolution No 7 (approval of material related party transactions), which was not approved by the members, company secretary Virendra Bhatt said in the consolidated scrutiniser's report.
In a regulatory filing, Wockhardt said out of the total valid votes cast, 50.13 per cent was against the ordinary resolution for approving the material-related party transaction, while 49.87 per cent was in favour.
In the notice for the AGM, Wockhardt had sought approval of its members for the company to avail secured/unsecured short-term/long-term funding facilities by way of loans, credit facilities, debt instruments or in any other form, from Khorakiwala Holdings and Investments Pvt Ltd (KHIPL) on arms-length basis, such that the maximum amount of the funds borrowed from KHIPL, along with any outstanding amount borrowed shall not in aggregate exceed Rs 1,600 crore.
The company had explained that Sebi regulations had modified the threshold for determination of material-related party transactions, requiring prior shareholders' approval to the lower of Rs 1,000 crore or 10 per cent of the annual consolidated turnover of the listed entity as per its last audited financial statements.
"Since the upper limit of the maximum drawdown proposed to be availed from KHIPL pursuant to the overdraft facility exceeds the threshold for seeking shareholders' approval under the listing regulations, it is proposed to seek approval from the public shareholders of the company for entering into/continuing with the aforesaid facility," it had stated
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