 "'JP's objective of selling hydel assets to JSW not disclosed'")
Stakeholders' Empowerment Services (SES) has objected to these resolutions, saying there is a lack of clarity and that the disclosures by the company have been selective and inadequate. The first resolution seeks approval of "sale of securities of Himachal Baspa Power Co Ltd (HBPCL) by the company to JSW Energy Ltd". The resolution has come up following a nod by the high court for a scheme of arrangement to hive off the assets on sale.
SES said the objective of hiving off - that it was for eventual sale to JSW Energy - was not disclosed in the resolution that was put up for approval in the court-convened meeting (CCM) in February this year.
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It added, "Neither the (current) resolution nor explanatory statement to the resolution mentions what is the objective of the sale. Why the company needs to sell the undertaking? It gives reference to SPA (share purchase agreement) entered into, with JSW Energy for sale of securities indicating that the transfer is pursuant to SPA, as if SPA itself is the objective," the proxy firm said in its note.
It also criticised the company's decision not to provide the SPA on its website and asking shareholders to visit its headquarters in Himachal Pradesh to inspect the same. A JP Power spokesperson said, "We differ with the views of SES. We deny 'there is any lack of clarity and that the disclosures are inadequate', as stated to have been inferred by SES."
The company also referred to another proxy advisory, Institutional Investor Advisory Services, "which has recommended voting for all the three resolutions circulated by the company vide its notice dated May 30." The spokesperson said the current resolution was only a consequential resolution.
"The Resolution No 1 in notice dated 30.5.2015 is only a consequential resolution to further facilitate implementation of the decision to transfer the securities issued by HBPCL to JSW, as per the requirements of Companies Act, 2013. The explanatory statement attached to the said notice also gives all relevant facts including the objective/rationale for sale and the enterprise value at which the same is being transferred to JSW."
"It would have been a consequential resolution only if shareholders had approved the sale of business to JSW earlier. All that the court and shareholders have approved is the hiving off of the business to subsidiary," said J N Gupta of SES.
The spokesperson added disclosures of JSW deal have been made even in the notice to court convened meeting in February.
"The Valuation Report of the Independent Valuers, Fairness Opinion of the Sebi (Securities and Exchange Board of India)-registered Merchant Banker and the Securities Purchase Agreement entered into between the Company and JSW Energy Limited were kept open for inspection along with other related documents."
But, less than 200 out of 0.33 million shareholders of the company attended the court convened meeting in February.
The second resolution was to make further investment of up to Rs 1,000 crore in Prayagraj Power Generation, a subsidiary of JP power. While SES felt the amount was excessive compared to the project cost, the company argued this was in order and "the inference drawn by SES is not correct and just".
- 2 of 3 resolutions put on vote through postal ballot by JP Ventures under proxy advisory SES scanner for alleged inadequate disclosures
- One resolution for sale of hydel assets in Himachal to JSW in Rs 9,700-cr deal
- Second for further investment of up to Rs 1,000 crore in Prayagraj Power Generation, subsidiary of JP Ventures