Finolex Cables under pressure after two advisory firms accuse the firm of poor corporate governance
- Proxy advisory firms have flagged corporate governance issues at
Finolex Cablesand advised shareholders to vote against reappointment of three directors at the annual general meeting.
- All eyes are now on the AGM scheduled for Wednesday, September 29.
- Reacting to the reports, shares of Finolex Cables were down 1% on Tuesday.
Proxy advisory firms -- InGovern Research Services and Stakeholders Empowerment Services (SES) have reportedly highlighted governance issues at Finolex Cables, stating that the board may be violating corporate governance norms. Moreover, they have advised shareholders to vote against the reappointment of the company’s directors. Proxy advisory firms provide research, data, recommendations on management of companies that will help shareholders vote rationally in a shareholder meeting.
Apart from this, family feud in the Finolex Group companies -- Finolex Cables and
Advertisement“There are two companies in the stable, Finolex Cables and Finolex Industries, which are currently headed by cousin brothers [sic]. There is an intense fight between the brothers over the ownership of the shares that are held in some trust. Both are at loggerheads and one party votes against the other in the meetings,” said JN Gupta, founder and managing director at proxy advisory firm SES in an interview to The Economic Times.
Finolex cables is the largest manufacturer of electrical and telecommunication cables. Finolex Group is an Indian conglomerate company based in Pune comprising Finolex Cables, Finolex Industries, Finolex J-Power Systems and Finolex Plasson Industries.
In the ₹7,500-crore Finolex Cables, about 30.7% stake is held by Orbit (Finolex Group holding firm), 14.5% is held by Finolex Industries and the rest is with the public. Adding to it, these three companies have four common directors -- Deepak and Prakash Chhabria, Sunil Pathak and Sanjay Asher.
Investors will now monitor the annual general meeting (AGM) that will result if additional directors -- PR Barpande, Avinash Shridhar Khare and Firoza Fredoon Kapadia are reappointed or not.
The board had appointed them as additional directors on September 30, 2020, and is now seeking shareholders nod to appoint them as independent directors for a five-year term under different resolutions, even though they are liable to retire.
According to proxy advisory firm SES, as stated by a media report, these resolutions are superfluous for one and violative of SEBI norms.
AdvertisementSEE ALSO: Take a deeper look at the meteoric rise of Glance that may have caught Mukesh Ambani’s eye
Sensex down over 500 points; Power Grid Corp, NTPC, Coal India gain up to 5%
Gujarat State Fertilizers and Chemicals surges over 4% on reports of anti-dumping duty approval
Popular on BI
- 'Harry Potter' had a chance to represent Indian kids like me, but all we got were Parvati and Padma Patil's atrocious Yule Ball outfits
- Manchester United owners are getting drawn to the world's biggest cricket league – here's why
- Elon Musk sparks another Shiba Inu rally ‘to the moon’ — other Shiba coins follow suit
- SEBI is hiring financial content writer interns with a stipend of ₹45,000 per month
- Dream11 parent Dream Sports to hire 200 people in India across various domains
- Snap's stock plummets by 22% as Apple’s iPhone privacy changes hit its advertising business
- Twitter now lets anyone on Android and iOS host Spaces
- PUBG: New State with ‘PC-like’ gameplay will officially launch on November 11