Mumbai: Proxy advisor InGovern Research has alleged Pune-based Cables violated corporate governance norms over the appointment of board directors. The firm has recommended shareholders to vote against eight resolutions pertaining to the appointment of directors.
“The company has not been able to get its shareholders’ nod for appointing directors for the past three years. They have appointed persons as additional directors to the board soon after the AGM (Annual General Meeting) so that their resolutions come up for shareholder approval only after almost a year,” said Shriram Subramanian, founder and MD of InGovern Research Services.
The company’s AGM is scheduled to be held on September 29. An email query sent to Finolex went unanswered until press time Tuesday.
Some companies appoint independent directors as additional directors, subject to the shareholders’ approval at the next general meeting, corporate governance experts said. Sebi has proposed changes to the regulations that independent directors shall be appointed on the board only with prior approval of the shareholders at a general meeting. The rules will come into effect from January 1, 2022.
“While the regulator is cognisant of these regulatory gaps, it is yet to become a law that can counter such sharp practices wherein proposals for shareholders’ approval of director appointments are being done almost a year after the appointment date additional director of the company,” the report said
InGovern said the company must seek shareholders’ approval for a fresh set of independent directors.
“We seek that the company unbiasedly follows requirements of company law and Sebi Regulations to ensure that all non-independent directors, including the executive chairman, retire by rotation, and shareholders ought to be given the right to decide on the reappointment,” the firm’s report said.
InGovern said Deepak Chhabria, Finolex’s executive chairman, should retire by rotation like the other directors because he is the longest-serving director on the board.
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