GKB Ophthalmics Limited, a leading ophthalmics company, has been directed by the Labour Commissioner to pay Rs 8.82 crore in relation to an ongoing labour dispute. This development marks a significant turn in a legal battle that has been unfolding since 2009.

The Labour Dispute

The dispute originated in 2009 when the Goa Trade & Commercial Workers' Union filed for adjudication of a Charter of Demands on behalf of GKB Ophthalmics' workmen. On May 25, 2021, the Industrial Tribunal in Panjim, Goa, passed an award in the case.

The Recovery Order

On September 12, 2023, at 10:22 AM (IST), GKB Ophthalmics received an order from the Labour Commissioner directing the recovery of Rs 8,82,00,856.00 from the company. This order is related to the execution of the award passed by the Industrial Tribunal in 2021.

Company's Response

GKB Ophthalmics has stated that it does not admit to this liability and plans to challenge the recovery order in the High Court of Bombay at Goa. The company is already contesting the original award through a writ petition (WP/358/2021) filed in the same court.

Legal Arguments

The company argues that several crucial factors were not considered by the Industrial Tribunal while passing the award, including:

1. Industry cum Region formula
2. The financial position of the company
3. Comparable industries in the region

GKB Ophthalmics believes these omissions provide strong grounds for setting aside the award.

Financial Implications

In its disclosure to the BSE, GKB Ophthalmics acknowledged that the order is likely to have a material impact on its financial position. However, the company emphasized that it is not admitting the liability and will be taking appropriate legal steps to challenge the order within the permitted time period.

Next Steps

The company is currently in consultation with its legal counsel to prepare its challenge to the Labour Commissioner's order in the High Court. This legal action will be in addition to the ongoing proceedings to set aside the original award dated May 25, 2021.

GKB Ophthalmics has assured its stakeholders that it will keep them informed of any further developments in this matter. The company's management is actively engaged in addressing this significant legal and financial challenge.

As this situation continues to unfold, investors and stakeholders of GKB Ophthalmics will be closely watching the outcomes of the legal proceedings and their potential impact on the company's operations and financial health.

In a recent development that has caught the attention of the investment community, ace investor Vijay Kedia has responded to a controversial incident involving GKB Ophthalmics Ltd and a disgruntled shareholder. The incident, which occurred during the company's virtual annual general meeting (AGM), has sparked discussions about shareholder activism and corporate governance.

The Incident

During GKB Ophthalmics' virtual AGM, shareholder Abhishek Kalra, who owns just one share of the company, launched a verbal attack on the management. Kalra directed his criticism at Managing Director Krishna Gopal Gupta, citing poor stock performance and governance issues. In a bold move, the shareholder demanded Gupta's resignation within 10 days.

Vijay Kedia's Response

Vijay Kedia, known for his astute investment strategies and market insights, offered a balanced perspective on the incident:

1. Condemnation of Language: Kedia explicitly condemned the harsh language used by Kalra during his confrontation with the GKB Ophthalmics management.

2. Support for the Message: Despite his disapproval of the approach, Kedia expressed support for the underlying message conveyed by the shareholder. He emphasized the importance of respecting shareholder money and addressing their concerns.

3. Call for Accountability: Kedia pointed out that incompetent managements drawing high salaries and perks should be held accountable for their performance.

Broader Implications

This incident highlights several key points:

• Shareholder Activism: The event underscores the growing trend of shareholder activism in India, even among retail investors with minimal holdings.

• Corporate Governance: It brings attention to issues of corporate governance and the need for transparency in company operations and decision-making.

• Investor Sentiment: Kedia's comments reflect a broader sentiment among India's investing community, which now comprises approximately 13 crore investors.

• Management Responsibility: The incident serves as a reminder to corporate managements about their responsibility towards shareholders and the potential consequences of poor performance.

While the confrontational approach taken by the shareholder has been criticized, the incident has opened up important discussions about the rights of shareholders and the accountability of company managements. As the situation unfolds, it remains to be seen how GKB Ophthalmics will address these concerns and what impact this may have on the company's future governance and performance.