| Lodha: Exit mode
Mumbai, July 31: As a fallout of the tussle over the MP Birla group’s assets, shareholders of Hindalco today voted out Lodha and Co as branch auditors of the AV Birla group company.
The resolution to re-appoint R. S. Lodha was defeated by a voice vote at the company’s annual general meeting and statutory auditors will take charge instead.
After a majority of shareholders, who spoke at the AGM, opposed the resolution for reappointment of Lodha & Co as auditors, chairman Kumar Mangalam Birla handed over the chair to director E. B. Desai since the matter was delicate and concerned the Birla family.
Desai said the company has received intimations from major group shareholders that they did not favour the reappointment of Lodha.
The shareholders did not want a ballot and the motion was put to voice vote which was defeated unanimously.
According to the shareholders, given the controversy, reappointment of Lodha was not in the interest of the company and the shareholders.
T. M. Davar, a small shareholder, said: “I don't think it is in our interest. I don't think it is in the interest of the company either. Lodha has a fiduciary interest as he has Rs 5,000 crore in his pocket.”
“Our auditors are from Calcutta. When we have so many good auditors in Mumbai, why do we spend so much money on those guys. We will oppose this resolution,” shareholder Shobana Mehta said.
Asha Lata Maheshwari, a senior shareholder, said by appointing Lodha & Co as auditors, “balancesheet mein daag rahega (It will smear the balancesheet).
“We have heard shareholders express their view on the subject. Many are not very comfortable with the reappointment of Lodha & Co,” Desai said.
Desai asked people in favour of the resolution to reappoint Lodha as auditor to come forward. “I think there is a proposer and a seconder within us,” he said. Two men stood up and proposed and seconded the resolution.
When people against the resolution were asked to raise their voice, most shareholders in the hall yelled, “All are against”.
“There will not be any vacuum,” Kumar Mangalam Birla reassured shareholders later.
Singhi & Company, chartered accountants from Calcutta, have been appointed as statutory auditors.
Lodha & Co was the branch auditor for the accounts maintained at the Birla Copper Division at Dahej in Gujarat.
Marginal rise in net
Hindalco has posted a marginal rise in first-quarter net profit at Rs 195.3 crore against Rs 193 crore in the same period last year. Net sales rose 44 per cent at Rs 1,673.3 crore from Rs 1,159.8 crore in April-June 2003.
The aluminium division contributed Rs 774.4 crore against Rs 664.7 crore in the year-ago period.
The copper division's net sales stood at Rs 900.8 crore in April-June 2004 against Rs 495.1 crore. The higher output and international prices drove the performance of the division.