IndusInd Bank Shareholders Reject Promoter Bid for Board Nominees

IndusInd Bank shareholders have rejected a promoter resolution to appoint two nominee directors to the bank's board, with 54% of votes cast against the proposal. The proposal received only 46% of the votes in favor. Despite the setback, other major resolutions, including the appointment of Rajiv Anand as MD & CEO, were approved by shareholders.

IndusInd Bank shareholders have rejected a resolution proposed by the bank's promoters, the Hinduja Group, to appoint two nominee directors to the board. The proposal received 54% of the votes against it, while only 46% were in favor [1]. Despite prior approvals from the Reserve Bank of India (RBI) and the bank's board, concerns raised by proxy advisors led to the proposal's defeat.

The Hinduja Group, through its entity IndusInd International Holdings Limited (IIHL), had sought to appoint two non-executive, non-independent directors. The proposal required an amendment to the bank's Articles of Association, which was introduced at the Annual General Meeting (AGM). IIHL had previously secured necessary approvals from the RBI and the bank's board [1].

Moses Harding, President of IIHL, stated that the proposal was fully compliant with applicable laws and governance norms. He noted that the proxy advisors' observations regarding the resolution might have been misinterpreted and expressed the group's intention to clarify and address these concerns [1]. IIHL has a history of supporting IndusInd Bank through various business and regulatory cycles without seeking board representation or nominating specific individuals [1].

Other major resolutions, including the appointment of Rajiv Anand as Managing Director and Chief Executive Officer (MD & CEO) for a period of three years, were approved by shareholders. The appointment of Rajiv Anand was a significant decision, as he will be instrumental in guiding the bank's future direction [2].

The rejection of the nominee director proposal underscores the shareholders' vigilance in ensuring that the bank's governance practices align with their interests. The bank's management will need to address the concerns raised by proxy advisors and work towards rebuilding shareholder confidence.

References:
[1] https://economictimes.indiatimes.com/industry/banking/finance/banking/indusind-bank-shareholders-reject-promoters-proposal-to-induct-nominee-directors/articleshow/123590361.cms
[2] https://www.business-standard.com/companies/news/indusind-bank-shareholders-reject-promoter-director-nomination-125083000421_1.html