ITC files Rs1,000 crore defamation suit against IiAS
Mumbai: In a first-of-its-kind case, a Nifty 50 company, Indian Tobacco Corp. Ltd (ITC), has slapped a Rs1,000 crore defamation suit against proxy advisory firm Institutional Investors Advisory Services (IiAS), for allegedly making defamatory comments against the company’s directors in one of its reports, two people with direct knowledge of the matter said.
“The suit has been filed on the basis of defamatory comments made against directors of the company in its report and not on the recommendations made to shareholders,” said one of the two people mentioned above.
An ITC spokesperson declined to comment as the matter is subjudice. Phonecalls and text messages sent to Amit Tandon, chief executive of IiAS, were not answered.
The suit has been filed in the Calcutta high court against a 7 July IiAS report that questioned the firm’s proposal to pay a monthly remuneration to Yogesh Deveshwar, ITC’s non-executive chairperson.
The case was first heard on 29 August by the Calcutta high court. A fresh date of hearing is yet to be given. According to the report, the board structure and proposed remuneration signalled Deveshwar’s continuing control over the firm, which it said would undermine new CEO Sanjiv Puri.
At an aggregate estimated at Rs12.71 crore, Deveshwar’s remuneration is higher than 90% of the CEOs and whole-time directors of S&P BSE 500 companies, IiAS said.
“Although Yogi Deveshwar’s proposed remuneration is in the range of CEO Sanjiv Puri, IiAS estimates that, based on the past, his remuneration—in actual terms—will be higher than that of Sanjiv Puri”, it said in the report.
Shriram Subramanian, founder and managing director of InGovern Research Services Pvt. Ltd, a proxy advisory firm, said such a move “muzzles independent voice”.
“It is a move to muzzle free voice and opinion formed out of scrutiny of publicly available data. The opinion was to aid institutional investors in taking an informed decision,” said Subramanian.
“Proxy advisory firms are registered with Securities and Exchange Board of India (Sebi) and work under the norms prescribed by the regulator. So the firm (IiAS) has provided recommendations as per prescribed norms,” he added.