The National Company Law Appellate Tribunal has upheld the shareholders decision to vote against the reappointment of Deepak Chhabria, former executive chairman, Finolex Cables.

“The result of the AGM held on September 29, 2023, regarding the reappointment of Deepak Chhabria as executive chairman of Finolex Cables, needs no interference in this appeal,” said the NCLAT bench led by chairperson Justice Ashok Bhushan and technical member Barun Mitra on Tuesday.

Further, NCLAT upheld the amendment to the (Article of Association) AoA and affirmed the previous ruling by the National Company Law Tribunal. It dismissed Deepak Chhabria’s plea to invalidate the 2019 extraordinary general meeting that had amended the Articles of Association of Orbit Electricals, thereby revoking certain rights held in Finolex Cables.

Orbit Electricals is the holding company of Finolex Cables.

The appellate tribunal also directed the NCLT, Mumbai to resolve outstanding issues on the company’s shareholding in six months. The issue involves contentious approval for transfer of 100,300 shares by the company’s patriarch Pralhad Chhabria to his son Prakash Chhabria.

Battle for control

Started in 2016 with the death of company’s founder Pralhad Chhabria, the Chhabria family’s battle for control of Finolex Cables has gone through many twist and turns with the conflict primarily involving Deepak Chhabria and his cousin Prakash Chhabria.

The five-year term of Deepak Chhabria as executive chairman came up for renewal in June last year. The proposal to reappoint him was defeated at the AGM held last September despite NCLAT allowing him to be the representative of Orbit Electricals on the Finolex board as per the Article of Association of the company.

In September, the NCLAT also directed a status quo on the conduct of the AGM till it decided a dispute between cousins Prakash Chabria and Deepak Chabria.

However, the Supreme Court vacated NCLAT order and asked the scrutiniser of the AGM to publish the results immediately. It also directed NCLAT not to pronounce its order till the results were published.

However, NCLAT issued its ruling, before the AGM results were released, prompting the Supreme Court to initiate an inquiry into the tribunal’s actions. Following the Supreme Court’s intervention, the NCLAT suspended its order.

The Supreme Court directed NCLAT chairperson Justice Ashok Bhushan to re-hear the case and make a new decision, which led to the judgment delivered on Wednesday.

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