Shareholders of wind turbine maker Suzlon Energy approved reappointment of promoter Tulsi Tanti as a managing director along with a pay hike despite strong vote of objection by institutional shareholders and proxy advisory firms asking public shareholders to reject the proposal.
Voting results for the postal ballot show public shareholders or retail investors voted to clear the proposals even as institutions voted down some of the proposals, including the continuance of Tanti as the chief.
Earlier, Mumbai-based proxy advisory firm Institutional Investor Advisory Services (IiAS) had asked Suzlon's shareholders to reject the re-appointment of chairman Tulsi Tanti as MD and said: “It's the time to change the leadership outside controlling family and find some people who might understand the business better and be able to correct the situation. Another proxy advisory firm InGovern had also suggested voting down the proposals.
Tanti had also sought 50 per cent pay hike even as the debt-laden firm continues to be in the red. Tanti and the promoter group own 39 per cent stake in the company.
The proposals, which saw strong objection from institutional shareholders, include reappointment of Tanti as MD, pay hike for Tulsi Tanti’s brother Vinod, who is COO of Suzlon Wind International, and a special ESOP plan for some employees. As much as 71 per cent of institutional shareholders, who participated voted down these proposals. However, majority of the other public shareholders went with the promoters and voted for the proposals, ensuring the resolutions were passed.
Moreover, participation by just around 14 per cent of the institutional shareholders and under 6 per cent of other public shareholders tilted the balance in favour of the proposals.
Wind turbine maker Suzlon counts amongst its shareholders Citi Venture Capital International (CVCI), which had invested in the firm before its IPO and had made a killing when it part exited during the public float.
In November 2010, IDFC PE, an infrastructure-focused PE firm, had swapped its stake in SE Forge Ltd, the components arm of Suzlon. Post this, IDFC held 1.80 per cent stake in the company which it sold last year for Rs 78.4 crore. IDFC PE (now IDFC Alternatives) had picked up 17.1 per cent stake in SE Forge for Rs 400 crore in September 2008.
Suzlon has sold some assets as part of its move to cut debt.
In the third quarter of the current fiscal, Suzlon raked in total income of Rs 5,052.20 crore compared with Rs 4,047.71 crore in the same period a year ago. Its net loss stood at Rs 1,075 crore against a loss of Rs 1,155 crore in the year-ago period.
(Edited by Joby Puthuparampil Johnson)