A Board Seat

Alembic’s small shareholders demand a board seat. It may be a big step for small shareholder activism.

- P.B. Jayakumar

Can small shareholders, who hold shares worth less than ₹20,000, earn a board seat and have a say in the running of listed companies? A section of minority shareholders of India’s oldest drug company, Alembic Ltd, has raised this question in an unprecedented move in India’s corporate sector.

A section of small shareholders under the banner of asset management firm Unifi Capital, which has less than 3 per cent stake in the company, had asked the Alembic management to appoint Murali Rajagopalachari, Vice President of Unifi Capital, as an independent director. The Board of the Vadodara-based company rejected the proposal on July 28; the AGM, held the same day, also did not consider the proposal.

“In response to Alembic’s decision to reject our proposal, we are studying our options,” says Sarath Reddy, Managing Director, Unifi Capital. According to company law experts, Unifi has the option of approaching Sebi and other regulatory agencies.