Solar Industries AGM exposes feud between Nuwal brothers

The dispute in the promoter family of Nagpur-based Solar Industries India with nearly a ₹35,000 crore market value has taken a new turn.

Four special resolutions, including on the appointment of an independent director and alteration of the company's articles of association, moved at the annual general meeting of the industrial explosives and ammunition manufacturer last week, were defeated amid a fight between two brothers: Satyanarayan and Kailash Chandra Nuwal.

In the AGM held on June 21, the promoter group led by Kailash Chandra Nuwal voted against all nine resolutions, including the adoption of the audited financial statement for the fiscal year 2022-23 and the declaration of the final dividend. While five ordinary resolutions sailed through, four special resolutions were not approved. Special resolutions need 75% of the votes in favour to be approved, while ordinary resolutions require only a simple majority. Here all resolutions got around 69% of the votes in favour and the rest against.


The re-appointment of Sujitha Karnad as a non-executive independent director, alteration of the articles of association, and two other resolutions for increasing the limit of borrowings and the limit for providing security against the borrowing did not get enough votes.

An email sent to the company seeking comment did not elicit any response till press time Thursday.

Satyanarayan Nuwal and his family own a 43.88% stake in the company, while Kailash Chandra Nuwal and his family hold 29.28%. Satyanarayan Nuwal currently runs the company as chairman. His son, Manish, is its chief executive.

Shares of Solar Industries have rallied 40% in the last one year. On Wednesday, they closed 2.51% higher at ₹3,839.45 on the BSE, with a market capitalisation of about ₹34,750 crore. Markets were closed Thursday.

"The factions of families tend to vote against resolutions impeding the smooth operation of the business, and more worrying is that these are distractions from the day-to-day functioning of a company," said Amit Tandon, founder of Institutional Investor Advisory Services. "Unfortunately, no family seems immune from such afflictions. Like a cyberattack, with family disputes, investors need to worry about not if but when."

The dispute between the brothers started when the company secretary, on July 31, 2020, sent a letter to Kailash Chandra Nuwal stating that he had automatically vacated the office on November 7, 2019, after failing to make certain disclosures.

Subsequently, Kailash Chandra Nuwal moved the National Company Law Tribunal against the company and others for interim relief. The NCLT in an interim order on February 9, 2021, allowed him to act as director and vice-chairman. The company and its majority shareholders petitioned the NCLAT on February 24, 2021, but their appeal was dismissed on December 14, 2021.

Many of the businesses in India are family-owned, and several run into disputes between family members. Some examples are the dispute between the Kirloskar brothers of Pune, Baba Kalyani and his sister Sugandha Hiremath over the chemical company Hikal, and Prakash and Deepak Chhabria over Finolex Cables.