2 min read.Updated: 28 Sep 2021, 12:34 AM ISTLivemint
Finolex has sought shareholders’ approval for the appointment of Padmanabh R. Barpande, Avinash S. Khare and Firoza F. Kapadia as directors who will retire by rotation as well as independent directors, SES said
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Finolex Cables Ltd in a statement on Monday said that it is in compliance with law, and requisite standards of corporate governance, after a couple of proxy advisory firms raised questions over proposed board of director appointments at the firm, which are being put up to vote at the company’s upcoming AGM.
Mint reported on Monday that after InGovern Research, another proxy advisory firm, Stakeholders Empowerment Services (SES), has advised shareholders of Finolex Cables Ltd to vote against the appointment of certain directors at the company’s 29 September annual meeting.
Finolex has sought shareholders’ approval for the appointment of Padmanabh R. Barpande, Avinash S. Khare and Firoza F. Kapadia as directors who will retire by rotation as well as independent directors, SES said, adding that the resolutions are contradictory to one another as the companies law states that independent directors do not have to retire by rotation.
“It may be noted that civil litigations are pending in courts since November 2016. In these litigations a question in issue is regarding the purported gift of a majority of shares of the family holding company Orbit Electricals Pvt. Ltd. (“Orbit") by Mr. P.P. Chhabria to Mr. Prakash Chhabria, very shortly before Mr. P.P.Chhabria passed away, after having left several documents recording how the shares standing in his name in Orbit were to be dealt with," said Mahesh Viswanathan, Chief Executive Officer of Finolex Cables in the statement.
“While it is not appropriate to comment on matters that are sub-judice, it is apparent that Mr. Prakash Chhabria is instigating actions against the interests of Finolex Cables Ltd., including by causing Orbit and Finolex Industries Ltd. (of which he is the Executive Chairman) to vote against the re-appointment of longstanding, respectable directors of Finolex Cables Ltd 2 years ago, and again against all the directors last year," he added.
“It may be noted that 2 FIRs have been registered by the police in Pune against Mr. Prakash Chhabria and others, and investigations are ongoing in both."
Finolex Cables Ltd. has responded to the stock exchanges when they raised queries on the same matters, the statement added. “It is requested that no heed be given to the false and speculative rumours being spread at the instance of Mr. Prakash Chhabria."
According to SES, the aforementioned resolutions for director appointments cast doubt on the independence of these directors, whose appointments are being sought.
If the appointments of Barpande, Khare and Kapadia as directors are confirmed, it will create a situation where they would continue as directors despite their stint as independent directors being completed, SES said.
“If the independent director is already aware that he/she would continue as a director even after the completion of tenure as independent director, this would impact independence right now itself since the term is not specific," the SES report said.
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