UB Engineering: the queer case of a company with no board

UB Engineering does not have a board any more as the company announced that its two remaining directors have resigned too. On Thursday, the Vijay Mallya-group engineering company said that Alfred Tuinman, executive director (commercial), had resigned with effect from April 3, 2014. That leaves only one director on board, the managing director JK Sardana. “Under these exceptional circumstances, when there is no Board the Company is unable to convene a Board Meeting…”

That’s a rather strange situation for a company to be in, where there is no board to take any important decisions that may be required, even if there is management to run day-to-day operations. The company has asked the stock exchange to approve the extension of its results announcement till August 2014. It is hoping to overcome these ‘exceptional’ circumstances by then, or it will again ask for an extension.
Earlier, in December 2013, it had announced that two non-executive directors had resigned with effect from October 2013.

UB Engineering has been incurring losses and during the nine months ended December 2013, it had earned revenues of Rs 214 crore but incurred a loss of Rs 108.5 crore. Its performance has been affected by the slowdown, according to notes to its results, which has affected the flow of orders, which has affected liquidity. Statutory dues of Rs 46.7 crore remain unpaid as of December 31.

The company is promoted by the UB group, which finds itself stretched financially chiefly due to debt taken by Kingfisher Airlines. The UB group owns a 40.7% shareholding in UB Engineering, with United Breweries Holdings Ltd being the main holding company, and of this 90.2% is pledged.

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