The Indian Film Company Limited Requisition Group (IFCRG) led by hedge fund Altima Partners has agreed to withdraw its demand to remove two directors — Raghav Bahl and Alok Verma — from the board of the film investment company listed on the Alternative Investment Market (AIM) in London.
IFCRG, which controlled over 21 per cent of the company’s equity, had raised the demand on claims of poor financial performance. Altima India Master Fund has 14.39 per cent in The Indian Film Company (IFC). Bahl, who promoted the company, has 21.64 per cent.
Under today’s agreement, which was reportedly an amicable one, the board has agreed to appoint Atul Setia, a director with Altima, and Deepak Gupta, an independent businessman with shareholding in IFC, as additional non-executive directors of the company (subject to regulatory approvals). Gupta is independent from, and is unconnected with, both IFCRG and Bahl’s company Network 18.
The board has also resolved to conduct a strategic review of the company to enhance long-term shareholder value. The review will be conducted by Gupta and Setia and overseen by Sameer Manchanda from Network 18. Altima has agreed that Setia will resign if its shareholding falls below 10 per cent,. A similar commitment has been given by Deepak Gupta.
Alex Walters, director at Pelham Public Relations, IFC’s London- based agency, said the two sides agreed to adjourn an extraordinary general meeting scheduled February 5. "The board is delighted to reach an agreement in the interest of the shareholders," he said.
A press release issued by The Indian Film Company said the IFCRG has acknowledged that “Raghav 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 company and its business.” Walters said that the shareholders were against the removal of Raghav Bahl.
Bankside Consultants, the public relations agency representing the IFCRG, they are happy that their main demand for a strategic review of the company has been accepted, which was Altima’s main demand.
The dispute between IFC and IFCRG started earlier this month when a group of shareholders led by Altima claimed that that the company was showing poor financial performance and returns despite the fact that it distributed made some hit movies like Singh is Kinng, Jab We Met and Ghajini.
IFC shares, said the IFCRG were listed on AIM at 100 pence and were trading at 25.5 pence, a discount of 75 per cent on December 22, when the EGM was called, and substantially below the company’s stated Net Asset Value (NAV) of 99.4 pence per share on September 30.
The shareholders were also concerned about the financial results the company published, which show that in the first 18 months of operation it produced a total net profit of £3.4 million (of which £2.0 million was earned in interest) on an initial equity capital of £52.8 million (net of issue costs). IFC had pointed out that the company has being doing financially well and had already invested the money which it had raised from the AIM listing.
