In what appears to be a hostile bid on The Indian Film Company Ltd (IFC), one of its investors has sought the removal of its promoter-director Raghav Bahl, who runs the Network 18 group.
Altima India Master Fund, which has a 14.39 per cent stake in IFC, also wants the removal of another director Alok Verma from the India-focused motion picture company's board, and replace the duo with Aashish Vyas and Atul Setia.
The Bahl-promoted company, which has noted filmmaker Shyam Benegal as chairman and Lord Meghnad Desai as another director, has called an extraordinary general meeting (EGM) at its headquarters at Guernsey in Britain Feb 5 to defeat the resolutions.
"We unanimously recommend that you vote against all the resolutions which are to be proposed at the EGM to be held on 5 February 2009," said the letter to shareholders from the existing management, written by Benegal himself.
"The board's view is that the proposed removal of the two directors, at a time when the company is successfully executing its stated strategy, would be detrimental to the company's business and prospects," said the letter, a copy of which is with IANS.
"No reasons whatsoever have been provided for the proposed removal of Raghav Bahl and Alok Verma, nor has any explanation been provided on how their removal and proposed replacement will benefit the company and all its shareholders."
Benegal's letter also said that the fund may want the firm to consider a share buy-back scheme or distribute any excess cash it may have as special dividends, but without any formal recommendations or detailed analysis on that.
The resolutions to remove Bahl and his associate, as also to nominate two other persons in their place on the company's board, require a simple majority.
The other investors in the company include Bahl (21.64 per cent), Elara Capital (9.58 per cent), Deutsche Bank (10.55 per cent), HSBC Investment (9.10 per cent), Viacom Brand Solutions (4.55 per cent) and Dundee Leeds Management (9.09 per cent).
IFC has had several releases to its credit such as Welcome, Jab We Met and Singh Is Kinng. Its latest release, Ghajini, is said to have broken all box office records in India by grossing Rs 700 million in the opening week.
The company's stock trades on AIM - the London Stock Exchange's international market for small but growing companies. The exchange sees some 2,500 companies trade on its platform.