Shareholders of the Pune-based Finolex Cables have rejected the company’s resolutions to appoint five directors, after two proxy advisory firms raised corporate governance issues.
The shareholders — Orbit Electricals and Finolex Industries –— have voted against the appointment of Sunil Upamanyu as executive director, Prasad Deshpande as non-executive director, PR Barpande as non-executive independent director and Avinash S Khare as non-executive independent director.
The proposal to appoint Firoza Kapadia as non-executive independent woman director was also voted against, according to the scrutiniser’s reports filed with the stock exchanges.
The company also said that the negative votes cast by the two corporate shareholders — Orbit Electricals holding 30.7% and Finolex Industries holding a 14.5% stake — were being “disputed and contested”.
The negative votes should rightfully not be considered pending receipt of court orders since the matter is sub judice in the civil and criminal courts, it said.
The company held its Annual General Meeting (AGM) on September 29, while the e-voting for the proposals commenced on September 26 and ended on September 28.
Earlier in September, proxy advisory firm InGovern Research Services had raised governance issues at Finolex Cables, stating its board composition may be in violation of existing rules.
According to the proxy advisory firm, all directors, including executive chairman DK Chhabria, should be liable for retirement by rotation. The company had appointed Chhabria as a permanent director for life, it said, adding that this is in violation of provisions of the Companies Act.
Finolex Cables appointed additional directors immediately after the AGM and did not call for shareholder approval through postal ballot or EGM for almost a year till the next AGM. This resulted in additional directors being on the board for a year without shareholders’ approval, InGovern alleged.
There is a dispute between the major corporate shareholders — Orbit Electricals and Finolex Industries — on the stakeholding in the company, which is preventing Finolex Cables from getting the right set of directors, it had alleged.
Stakeholders Empowerment Services, another proxy advisory firm, had also raised governance issues at Finolex Cables.