InfoUSA’s management appears to have won a shareholder fight, and will return three individuals, including CEO Vinod Gupta, to its board of directors, pending a final vote tally. If confirmed, the three—Gupta, George Haddix and Vasant Raval—will serve on the board until their next scheduled election in 2009.
The firm announced Friday that it had won in a preliminary count of the vote.
The directors had been challenged by an alternative slate of directors backed by Dolphin Limited Partnership L.P., an investment firm. In a statement, Dolphin said that the vote at the May 26 shareholder’s meeting was “exceedingly close,” and that it is awaiting the final certification from the Independent Inspectors of Election.
The vote caps an effort that Dolphin, which owns 3.6% of the company’s shares, began last September. As part of its campaign, Dolphin questioned whether infoUSA made a good-faith effort to explore sale of the company after Gupta attempted to take it private. Dolphin also claimed infoUSA had blurred corporate assets with Gupta’s personal assets.
Gupta, who owns approximately 40% of infoUSA’s stock, has denied all of these charges.
“Over the last several weeks we have spoken with many of our shareholders and we appreciate their views about infoUSA,” he said in a statement. “The Board and management remain steadfast in our commitment to building value for all our shareholders.”
In the weeks running up to the vote, both sides issued numerous statements supporting and re-stating their positions: InfoUSA’s touted its potential for organic growth, management expertise and knowledge of the industry. It also accused Dolphin of looking to make a quick buck, and dredging up Medicare fraud fines levied against a company one of Dolphin’s principals had been involved in.
For its part, Dolphin alleged that infoUSA’s mention of the fines was “nothing but a blatant attempt to distract from the real issue: the infoUSA board’s lack of ability to rein in its chairman.” Dolphin maintained that Gupta inappropriately charged private jet, boat, travel services and residences to infoUSA: Gupta has maintained that these reflected legitimate business purposes.
The final vote tally should be released within seven to ten days.
