Shareholders of IDFC Ltd. rejected a resolution to appoint Vinod Rai as non-independent, non-executive director on the company's board.
At IDFC's annual general meeting on Wednesday, 62.3% of the shareholders who participated voted against the proposal, with only 37.7% in favour, according to disclosures to the stock exchanges.
Rai is currently the non-executive chairman of IDFC and his term as an independent director ended on July 30. In May, the nomination and remuneration committee and IDFC's board had approved Rai's appointment as non-executive, non-independent director till May 2023. Rai had already completed two terms as independent director.
The shareholders' decision follows a recent "informal" investor call organised by IDFC on Sept. 14, ahead of the AGM. During the call, the shareholders had expressed concern over the delay in unlocking value at IDFC by selling the asset management business. The AMC business is also an impediment to a merger with IDFC First Bank Ltd.
Some shareholders had also raised concerns about Rai's appointment during that call.
"The exact technical process of Mr. Rai's resignation and his appointment was discussed extensively and consulted with legal counsel and was conducted fully in accordance with all extant regulations and corporate governance processes," Ajay Sondhi, chairman of the NRC of IDFC's board, had told investors during the call.
Of the six resolutions placed in front of the shareholders, only Rai's appointment was rejected by shareholders, with others receiving requisite majority. These included:
Consider and adopt financial results for the year ended March 31, 2021.
Consider and appoint statutory auditors and fix remuneration.
Appointment of Jaimini Bhagwati as an independent director.
Appointment of Anil Singhvi as an independent director.
Payment of commission to non-executive director.
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