InGovern Research has suggested that FCL shareholders seek a postponement of the resolution, citing concerns over the adequacy of the notice period. On the other hand, Stakeholders Empowerment Services (SES) has advised shareholders to vote against it, while Institutional Investors Advisory Services (IiAS) has recommended that shareholders vote in favour of the resolution.
InGovern has alleged that the corrigendum published on September 16, 2023, does not meet the requirement of Section 118 (10) of the Companies Act and ICSI secretarial standards. The company issued a corrigendum on September 16, 2023, to the notice of the AGM. The original notice was dated September 4, 2023, and issued 25 days ahead of the AGM date of September 29, 2023.
“The ICSI Secretarial Standards 2, which has the force of law, states that any amendment to the notice, including the addition of any item of business, can be made provided the notice of amendment is given to all persons entitled to receive the notice of the Meeting at least twenty-one clear days before the Meeting,” InGovern said in a note.
According to the InGovern report, amendments to the Notice, if any, including the addition of any item of business, should be made at least twenty-one days before the Meeting. “Any amendment to the Notice, including the addition of any item of business, may be made at a shorter notice only after complying with certain provisions,” it said.
The company spokesperson said it had issued a corrigendum wherein the company has not added any additional item but has made a few insertions in the existing resolutions proposed under Items No. 4 and 6 in the AGM notice dated September 4, 2023.
“This corrigendum was issued with a view to providing shareholders better clarity and transparency on the concerned items and as a good corporate governance practice,” said Siddhesh Mandke, company secretary, FCL. “Kindly note that issuing of such kind of corrigendum prior to Annual General Meeting is a normal practice which has been followed by various other corporate groups like Central Depository Services (India), Nestlé India, Dalmiya Bharat etc. recently.”The InGovern report stated that in cases where e-voting is provided, any such amendment to the Notice can be made only by issuing a fresh Notice at least twenty-one clear days in advance. The Notice of any amendment, including the addition of any item of business, should be sent individually by any mode specified for sending Notice and not be given through advertisement.
Stakeholders Empowerment Services (SES), another advisory firm, has identified no concerns regarding Deepak Chhabria’s profile, time commitment, or attendance. Nevertheless, the firm recommended shareholders vote against the resolution and has recommended that the company consider separating the Chairman and Executive Director positions.
SES has also observed that remuneration paid to Deepak Chhabria is skewed in favour of the promoter director and said that the promoter family is extracting ownership premium from the company in the form of excessive remuneration.
“The remuneration of executive directors should be adequately capped both in relative as well as absolute form, especially in the case of promoter executive directors. Further, the variable component should be linked to the performance of the individual and as well as the performance of the company,” SES said in the report.
Meanwhile, Institutional Investors Advisory Services (IiAS) has recommended shareholders vote in favour of the resolution reappointing Deepak Chhabria as executive chairperson for five years, citing the proposed remuneration is commensurate with the size and complexities of the business and comparable with that paid to peers in the industry.