Institutional EYE

Commentary on Corporate Governance Issues

Alembic Limited: Will a set of small shareholders be able assert themselves?

A set of small, yet discerning shareholders in Alembic Limited have woken up to the fact that their ownership of shares in a company need not be passive: they are seeking a seat on the board Alembic Limited. Will the voice of these small shareholders be heard, or will it get drowned under the weight of an untested Companies Act? It is for Alembic Limited’s Independent Directors to shoulder this responsibility. This is a seminal case because it is the first time a set of sophisticated domestic investors are taking a firm stance. IiAS believes this case will define the equation between companies and their shareholders, but importantly, assess the protection regulations offer the small investor

ITC’s succession plan: Letting it go

IiAS recommends voting AGAINST ITC’s decision to pay a monthly remuneration to Yogesh Deveshwar, the company’s non-executive chairperson. IiAS believes the board structure, and the proposed remuneration, signal Yogi Deveshwar’s continuing control over the company, which undermines the recently appointed CEO Sanjiv Puri. Once Yogi Deveshwar has stepped down, he must let go. There is no doubt that Yogesh ‘Yogi’ Deveshwar’s reign over ITC has created tremendous value for its stakeholders. He has been at the company’s helm for over 20 years, during which the company’s revenues grew almost 12x to Rs. 604.9bn and profits grew 40x to Rs.105.2bn in 2016-17. The market capitalization also grew over 7

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