9 res­o­lu­tions a suc­cess be­fore Apollo hic­cup

Business Standard - - COMPANIES - SACHIN P MAMPATTA AND SHALLY SETH MOHILE

Eclec­tic firms from sec­tors rang­ing from chem­i­cals and ce­ment, to tech­nol­ogy and health­care have all passed res­o­lu­tions on re­lated par­ties in key man­age­ment po­si­tions over the last one year.

An anal­y­sis of such moves over the last 12 months from com­pany tracker Prime Data­base shows that there were at least nine res­o­lu­tions about re­lated par­ties in key man­age­ment po­si­tions, in­clud­ing ap­point­ments and changes in com­pen­sa­tion. Each of these res­o­lu­tions was suc­cess­fully passed.

This is in con­trast to the sit­u­a­tion faced by Apollo Tyres’ scion Neeraj Kan­war. A res­o­lu­tion for re-ap­point­ment did not pass with the req­ui­site ma­jor­ity.

The res­o­lu­tion for his reap­point­ment as man­ag­ing di­rec­tor was not passed as a spe­cial res­o­lu­tion as the votes cast in favour (72.72 per cent)

of the res­o­lu­tion were less than three times the num­ber of votes cast against (27.28 per cent) the res­o­lu­tion, said the ex­change no­tice fol­low­ing the vote.

“Apollo Tyres’ board of di­rec­tors will dis­cuss the res­o­lu­tion in the next meet­ing and de­ter­mine the course of ac­tion to be taken with re­spect to it. The com­pany would like to re­it­er­ate that it is the vi­sion and re­solve of the com­pany and its se­nior lead­er­ship to de­liver value to all its stake­hold­ers, in­clud­ing em­ploy­ees, share­hold­ers, cus­tomers, part­ners and other rel­e­vant com­mu­ni­ties,” said a state­ment from the com­pany. In­ter­est­ingly, the res­o­lu­tions for con­tin­u­a­tion of S Narayan as in­de­pen­dent di­rec­tor and Robert Stein­metz as non-ex­ec­u­tive di­rec­tor of Apollo were passed with the req­ui­site ma­jor­ity.

The change in the case of Kan­war is in con­trast to the norm over the last 12 month. All the other com­pa­nies in the sam­ple man­aged to suc­cess­fully pass res­o­lu­tions on re­lated par­ties in key man­age­ment po­si­tions. An ex­am­ple is the res­o­lu­tion for Elec­tros­teel Cast­ings’ ap­point­ment of Radha Ke­jri­wal Agar­wal as an of­fi­cer on spe­cial duty re­lated to strat­egy and cor­po­rate af­fairs. The ap­point­ment was ap­proved.

An­other ex­am­ple was Star Ce­ment’s re­vi­sion in the re­mu­ner­a­tion of Rahul Chamaria and Sachin Chamaria. This, too, was ap­proved.

Other com­pa­nies suc­cess­ful in pass­ing such res­o­lu­tions in­clude Aarti In­dus­tries, Ad­vanced En­zyme Tech­nolo­gies and Narayana Hru­day­alaya.

Res­o­lu­tions have to be viewed on a case-by-case ba­sis. But a 100 per cent suc­cess rate would sug­gest that op­po­si­tion is still in­fre­quent.

Ex­perts, how­ever, pointed out that there have been notable ex­cep­tions over the years af­ter a new leg­is­la­tion was in­tro­duced. This empowered mi­nor­ity share­hold­ers to re­ject such res­o­lu­tions in re­lated party trans­ac­tions and other res­o­lu­tions too. “Since e-vot­ing has been in­tro­duced un­der the new Com­pa­nies Act, each vote is be­ing counted. We have since seen about 80 share­holder res­o­lu­tions be­ing de­feated across cat­e­gories – re­lated party trans­ac­tions (RPTs), em­ployee stock op­tion plans (ESOPs), ap­point­ments, change in ar­ti­cles and many more,” said Amit Tan­don, founder and man­ag­ing di­rec­tor at IiAS. With over 4,000 listed com­pa­nies, each with mul­ti­ple res­o­lu­tions a year, there may be plenty of share­holder ac­tivism to come.

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