Estranged family of Gati promoter want board reconstituted

MUMBAI: The spouse and sons of Mahendra Agarwal, the promoter of listed logistics firm Gati, have approached the National Company Law Tribunal (NCLT) against him for alleged oppression and mismanagement in the company and have sought reconstitution of the board.

Brothers Dhruv and Manish with their mother Neera Agarwal approached the Hyderabad bench of the NCLT seeking tribunal’s intervention in the affairs of the company. They filed two separate petitions for Gati and TCI Finance, where Mahendra Agarwal is the promoter.

“Almost every single share in our father’s control, including those in the name of private companies, is pledged to lenders,” said Manish Agarwal, the younger son of Mahendra Agarwal. “So he is not an owner of the company in the true sense and it is very difficult for us as shareholders to repose our confidence in his decisions.” The cases have been filed by Neera & Children Trust that holds shares of Mahendra Agarwal’s wife and two sons.

The plea estimated fair valuation of Gati, including all its investments, businesses and immovable assets on a conservative basis to be not less than Rs 2,000 crore. However, the petitioners said in the proposed transaction with Allcargo, Gati is valued at only approximately Rs 915 crore.

“How can the board of Gati approve or even consider a deal where the company is being valued at only Rs 915 crore, when they know that the fair value of the company as of November 2018 is at least Rs 2, 000 crore,” Agarwals said in their plea.

Shareholders of Gati on Wednesday voted in favour of a resolution for preferential allotment of shares to Allcargo. Around 87% of the voters in the EGM voted for the resolution.

Similarly, in the case of TCI Finance, too, they have sought reprieve for oppression and mismanagement seeking interim reliefs injunction on the sale of properties of TCI Finance including shares of Gati.

They have also sought that Mahendra Kumar Agarwal and Meera Madhusudhan Singh be removed as directors, an investigation into the affairs of the company and re-opening of its books of accounts.

Neither Gati nor TCI Finance responded to an ET email seeking comments for this story. “We are seeking an order of injunction preventing TCI Finance from selling shares it owns in Gati, which is approximately 4% of Gati Limited.”

On December 19, the junior Agarwals had requested capital markets regulator Securities & Exchange Board of India (Sebi) to restrain an open offer from Allcargo to purchase additional shares of Gati citing various cases against Agarwal and a recent court mandate to attach his shares.

In a letter to an official at the Sebi, Neera Agarwal and her sons cited a Hyderabad court order on December 5 to attach 1.6 million shares of the Gati founder Mahendra Agarwal that the latter sought to sell to Allcargo through an open offer.

“Once the board is reconstituted, we can reexamine whether such a deal is in the interest of shareholders. Our only motive is that we are really concerned as shareholders and are interested in maximising the value of our own shares,” Manish Agarwal said.