While IiAS opposed Rama’s reappointment to the board and also her appointment as joint managing director citing lack of experience, Sanjay Kirloskar accused the proxy firm of inconsistency in its recommendations and said the advisory firm, in the past, recommended in favour of some other individuals of lower age for a similar position in much larger promoter-led companies.
According to Sanjay, there are multiple examples of members of the business families taking up high-level positions in listed companies of promoter-led groups at such young age, and many have successfully handled the tasks they have been given.
Kirloskar Brothers proposed to reappoint Rama, who holds a double major degree in Mathematics and Biology from Bryn Mawr College, USA, as director and appoint her as joint managing director for five years from August 3, 2021.
IiAS, while recommending voting against both resolutions, said individuals must have an established track record and work experience of at least ten plus years before being appointed director on boards of listed companies.
Citing over a dozen examples, Sanjay said individuals in their late 20’s and early 30’s with similar experience and qualifications had been appointed to the leadership position, and these youngsters, with their passion, knowledge and enthusiasm, have created an enormous amount of wealth for their shareholders. In response, IiAS said that most of the individuals mentioned by the company are founders or first-generation entrepreneurs and remained firm on its recommendation voting against a resolution pertaining to the appointment of Rama Kirloskar.
In a strongly worded letter to IiAS, Sanjay Kirloskar said one expects an independent firm to be competent, consistent, and professional. “The fact that glaring examples of its inconsistency need to be pointed out say a lot about your organization’s processes, capabilities, governance, and intentions.” He added that IiAS recently recommended the reappointment of persons indicted for fraud by Sebi to the boards of listed companies.
When contacted, Amit Tandon, MD, IiAS said in every instance, “when we recommend voting against, companies object”. “Therefore, we carry the company’s response in our report for investors to get both perspectives. To this extent, we have followed been fair and the principles of natural justice.”
“As far as the accusations of inconsistency are concerned, we have no motive to give differential treatment to any single company or individual. IiAS’ recommendations are based on IiAS Voting Guidelines that are reviewed every year,” he added. An email query sent to Sanjay Kirlokskar did not elicit any response until press time.
IiAS had also recommended voting against Ramni Nirula as an independent director, citing she was on the board of CG Power and was a member of its audit committee when several unauthorized transactions took place that led to funds being allegedly received by the promoters.
“Given the multiple corporate governance failures that lace her past board memberships, we don’t support her appointment as an independent director,” said IiAS.
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