MUMBAI: All the hulabaloo over the last couple of weeks over Raghav Bahl’s removal from the board of directors of AIM listed The Indian Film Company has now amounted to nothing.
Following constructive discussions the IFC Requisition Group (IFCRG) and the Board of The Indian Film Company Limited have reached an agreement in the interests of the shareholders of the company.
As a result of this, IFCRG has agreed to withdraw the requisition presented by one of its members, Altima India Master Fund and also supports the indefinite adjournment of the extraordinary general meeting of the company convened for 5 February 2009.
Altima India Master Fund wanted the removal of Bahl and and Alok Verma as directors from TIFC and instead wanted its own nominees Aashish Vyas and Atul Setia as directors on the board. However, IFCRG has acknowledged that Bahl’s contribution and the brand awareness of the Network 18 Group of companies that he controls, have made and continue to make important contributions to The Indian Film Company and its business.
The board has agreed to appoint Atul Setia and Deepak Gupta as additional non-executive directors of the company. Gupta is acting independently from, and is unconnected with, IFCRG and Network 18.
The board has also resolved to carry out a strategic review of the company to look into enhancing long term shareholder value in the future. The strategic review will be overseen by Setia and Gupta as well as Sanjeev Manchanda, an adviser to Network 18.
As part of the agreement, Gupta has undertaken that within three days of his and his associates ceasing to have an interest in 10 per cent or more in the company’s issued share capital, he would resign as a director. Setia has given a similar undertaking where Altima ceases to have an aggregate interest in 10 per cent or more of the company’s issued share capital.
The board and IFCRG believe that the appointment of the two new non-executive directors together with the forthcoming strategic review shall help ensure the company’s successful prospects for the future.
Earlier this month, Altima has gathered approximately 32 per cent shareholder consent to remove Bahl from the company’s board. Altima had said that while IFC invested in a number of movies which have achieved impressive box office performance, these have not translated into returns which are acceptable to shareholders, bearing in mind the risk profile of the business. "Consequently, since IFC shares were admitted to AIM at 100 pence, their performance has been extremely disappointing. Before the EGM was requisitioned on 22 December 2008, IFC shares were trading at 25.5 pence, representing a discount of nearly 75 per cent to the price at admission and the Company’s stated net asset value per share at 30 September 2008 (99.4 pence)," Altima had said.