Sanofi Not Com­ply­ing with List­ing Norms: Advisory Firm

The Economic Times - - Money -

Mum­bai: Proxy advisory fir m S t a ke h o l d e r s Em­power ment Ser­vices (SES) said Sanofi In­dia has not been com­ply­ing with the list­ing re gu­la­tions as well as Com­pa­nies Act since Oc­to­ber 21, 2015 af­ter it had ap­pointed L Guerin, N Ra­jaram and A Sood as whole-time di­rec­tors and des­ig­nated them as ex­ec­u­tive di­rec­tors.

The com­pany has called an an­nual gen­eral meet­ing on Fri­day when it will seek ap­proval from the share­hold­ers to ap­point these three di­rec­tors. SES is of the opin­ion that such a prac­tice is not good gov­er­nance, and hence rec­om­mends that share­hold­ers vote against the res­o­lu­tions.

“Ap­point­ment of these three ex- ec­u­tive di­rec­tors of the com­pany as al­ter­nate di­rec­tors is against the spirit of the Sec­tion 161 of the Com­pa­nies Act, 2013 which pro­vides that a di­rec­tor can­not hold two po­si­tions of di­rec­tors of the com­pany,” SES said in a note.

In re­sponse to an ET query, a Sanofi In­dia spokesper­son said that un­der the Com­pa­nies Act, the board of di­rec­tors is per­mit­ted to ap­point an al­ter­nate for a di­rec­tor dur­ing his ab­sence from In­dia for not less than three months. “These three were not ap­pointed first as whole-time di­rec­tors and sub­se­quently as al­ter­nates to non-ex­ec­u­tive di­rec­tors. The strength of the board con­tin­ues to be nine with three al­ter­nates”.

The com­pany said it has been ad­vised that it is in com­pli­ance with the pro­vi­sions of the Com­pa­nies Act.

SES has raised con­cerns about the “strong affin­ity” be­tween out­go­ing chair­man Vi­jay Mallya and two in­de­pen­dent di­rec­tors A Ne­dun­gadi and S Gupte, who have oc­cu­pied po­si­tions in the for­mer liquor baron’s group com­pa­nies.

“SES is of the opin­ion that such close as­so­ci­a­tion casts a doubt on in­de­pen­dence of A Ne­dun­gadi & S Gupte,” the note said.

Sanofi said Gupte and Ne­dun­gadi were elected as in­de­pen­dent di­rec­tors by the share­hold­ers of the com­pany through a postal bal­lot for a term of five years each from March 31, 2015. “They rep­re­sent the SIL Board in their in­de­pen­dent ca­pac­ity and not be­cause of any as­so­ci­a­tion with Dr. Mallya,” said com­pany spokesper­son.

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