Investors voted against me due to directorship in many firms: Parekh
MUMBAI: Deepak Parekh, the chairman of mortgage financier Housing Finance Development Corporation Ltd (HDFC), said that the company’s investors had voted against his reappointment on the recommendation of a US proxy advisory firm, which cited his directorship in many publiclisted companies as one of the reasons for negative voting.
In an exclusive interview with Mint, Parekh said that Institutional Shareholder Services Inc (ISS), the proxy advisory firm which had asked HDFC shareholders to vote against his reappointment, had made similar recommendations in the past as well.
Nearly a quarter of shareholders had voted against a resolution seeking to reappoint Parekh as a non-executive director on the HDFC board during a shareholder meet on 30 July. According to the company, Parekh received 24.86% negative votes, while 75.14% voted in his favour.
A second resolution to reappoint Keki M Mistry as the managing director for a period of three years showed 99.46% of public institutional shareholders voting in favour of the resolution.
While the names of US investors were not known, most of them outsource their voting to custodians who vote on the recommendation of a proxy advisor.
“Typically, US proxy advisors vote against all directors who continue on the boards of more than five listed firms,” said Parekh. “They voted in a similar pattern when it came to my re-appointment at Vedanta Resources Plc last year.”
According to the outcome of 2017 Annual General Meeting of Vedanta Resources, 91.5% had voted for the reappointment of Parekh as a director, while 8.48% had voted against him. Parekh is currently on the boards of seven listed firms, including DP World, Siements, Indian Hotels, Vedanta, HDFC Life, Vedanta Resources and HDFC Ltd.
According to HDFC’s shareholding pattern, LIC owns 3.8% while 20 investors own about 25% of the stock. Foreign investors include Aberdeen Asset Management, Oppenheimer Funds and GIC Singapore.