The 73rd annual general meeting (AGM) of engineering giant Larsen & Toubro (L&T) on Thursday witnessed some unpleasant scenes with non-executive chairman AM Naik summoning security marshals to evict shareholders who questioned him for getting the company's land to set up a cancer hospital in his granddaughter's memory.
The drama began when Uday Dixit, a shareholder and an ex-employee of L&T, which is the only large company majority owned by employees, questioned the rationale for the board to allow Naik to set a super specialty cancer hospital at the Powai campus in memory of Nirali, Naik's grand daughter who died of the dreaded disease as a child.
It can be noted while announcing the hospital Naik had said it was "his monument and legacy to L&T."
Dixit and a few other shareholders said the land allotted for the proposed hospital was supposed to be a manufacturing facility of the company till 2019.
"The land belongs to the collector who has given the licence to the company for manufacturing till 2019. How can you demolish it? We are not fools. How can the structure be demolished before 2019 and build a hospital and residential units? Let shareholders know," Dixit said.
To this Naik said L&T had paid the money for the land and so it belongs to the company.
To calm down the tempo, managing director and chief executive SN Subramanyan intervened saying, "We have done it as per the rules and regulations of the company as well as per the government norms. The hospital is not only for employees but also for the general public."
"We have taken all the necessary permissions and so there is nothing illegal. Moreover, the land will continue to belong to L&T. We have all the documents and I am answering you with all responsibility," Subramanyan said.
As the shareholders continued to interfere during the replies, Naik lost his cool and asked Dixit and others to shut up, angering the shareholders who demanded to be heard.
Following this, Naik called security marshals, saying "this is a shareholders' meeting and not a forum for your individual grievances. Where is the security? Let others talk and if anyone interrupts unnecessarily, throw them out."
Another shareholder wondered why Naik, who retired last September should continue to call the shots. "At 75, tell me Mr Naik, why can't you sit at home and play with the kids."
This forced Subramanyan to intervene again and told the shareholders that "Naik has been with this company from nowhere to whatever he is today. And I hope all of you benefited during his tenure including four bonus issues and now a buyback and dividend. Now at 75, he has retired and is only a non-executive chairman."
Some shareholders also did not like the Rs 9,000-crore share buyback announced saying they will not wish to give up their shares and suggested that the company go a rights issue.
One shareholder said he stands to lose if he gives up his shares for the money. "I would want to keep the shares for my future generation as I have been possessing L&T shares which originally belonged to my parents. If I retain them, I may earn higher returns in future."
Dixit wondered if the board can maintain the shares with them, then why should shareholders give up theirs.
L&T is the only large company in the country that is majority owned by its employees.
Anilkumar Manibhai Naik, who has served L&T for over 52 years, including as its head for over 17 years, retired last September and became non-executive chairman for three years beginning October 1, 2017.
And when he called it quits he took home a whopping a Rs 78.91 crore, including Rs 38.04 crore in retirement benefits of which Rs 32.21 crore is leave encashment alone.
Other allowances include perquisites of Rs 19.27 crore, and commission of Rs 18.24 crore.
Naik, who drew an annual salary of Rs 3.36 crore for FY17, is said to have rarely taken leave during his career.Naik, the son of a primary school teacher in Gujarat, joined the company as a trainee and became the company's youngest manager ever 33 after four years and eight months of service.