On
The Finolex Cables AGM is on September 29, that is next week. There is no stable board. For the last three years, it has been appointing additional directors on the day after the AGM and those directors come up for approval by shareholders one year down the line in the next AGM. Where is governance if shareholders have not appointed those directors? In fact, Sebi had pointed to this practice in its discussion document and in its proposals for appointment of directors which is effective from Jan 1st, 2022, wherein companies which had appointed additional directors have to necessarily follow through and get them passed by shareholders within three months.
The second issue is that the executive chairman, who is not liable to retire by rotation. This is also a permanency of a director role which we have been against as an overall concept in corporate India itself. Even last month that was voted out in one of the JK Group companies where two directors were proposed to be appointed for life. In Finolex Cables, Mr DK Chhabria, the executive chairman, is sort of appointed for life.
So what do you propose?
Firstly, the company has to come to the shareholders with a proposed fresh set of directors who are acceptable to shareholders. At the end of the day, what happens is the directors have already been there for one year and they have not been approved by shareholders at all. So there is the matter of competency of the directors and also, a fresh set of directors have to be presented to the shareholders. The entire genesis seems to be some sort of a promoter dispute that seems to be in court. This being a listed company, it is relevant from a corporate governance perspective for the regulator and other investors to take note of.
How should minority shareholders react or what are the next things to look out for in the Sony-Zee deal?
Shriram Subramanian: This is a positive for the company because if this deal fructifies, they will have to come to shareholders for vote, but at that time, the actual contours of that deal will be very clear. It is a positive because it creates the largest media company in India and one of the largest in the world.
Two, it brings on board a stable large promoter because Sony will own the plus percentage of shareholding of the company and there will be a reconstituted board. Sony will have its representatives on the board itself. This may be a company with better governance. If you do the math, it will be a company with more than Rs 50,000 crore market cap. So, minority shareholders have much to look forward to. But when it comes up for voting, at that time, we have to look at the specifics.
