BAT Fails The Damani Test, Nominee Doesn't Get VST Industries' Chair

Billionaire investor Radhakishan Damani likely opposed British American Tobacco's nominee Naresh Kumar Sethi's appointment as VST Industries Ltd.'s Executive Chairman for five years.

The Charminar cigarettes maker had sought shareholders' approval to reappoint Sethi as executive chairman from his current post of non‐executive director and chairman. The voting period ended on Dec. 15, with 5.26 crore public non-institutional votes coming in against Sethi's appointment.

BAT is the promoter of VST Industries and holds 32.16% stake in the company through affiliates The Raleigh Investment Co., Tobacco Manufacturers India Ltd. and Rothmans International Enterprises Ltd. Damani is the second largest shareholder, with total shares worth nearly 31% stake.

As per the company's shareholding disclosures, Radhakishan Damani, collectively, is single-largest non-institutional public shareholder with 5.26 crore shares.

When the final voting results came in, the proposal for Sethi's appointment received only 56% of the vote, which falls short of the 75% cutoff needed to pass special resolutions.

BAT had appointed Sethi on the Hyderabad-based cigarette-maker's board in 2018. When Aditya Deb Gooptu resigned as the company's managing director and CEO on November 4, the board had approved Sethi's appointment as Executive Director and Whole-time Director of the Company with effect from November 5.