Shareholders voted down promoters’ plan to add an extra board director, with 54% against.
Rajiv Anand’s appointment as MD & CEO was cleared, seen as key to the bank’s recovery.
Promoter IIHL, with its stake cut to 15% from 90%, has sought RBI nod to raise it to 26%.
Shares of IndusInd Bank edged lower on September 1 after the private lender’s shareholders voted down a key proposal at its annual general meeting (AGM).
A majority of investors, 54% of those that casted votes, rejected the promoters’ attempt to nominate an additional director to the bank’s board. The proposal followed a July move by the board to amend the lender’s Articles of Association, allowing promoters to nominate up to two directors, subject to shareholder approval.
The additional director’s role was to be non-executive and non-independent.
IndusInd International Holdings, the bank’s promoter, expressed disappointment over the outcome, saying it believes the vote stemmed from ‘a misinterpretation.’ In a statement, IIHL said it is open to addressing shareholder concerns while staying aligned with the permissions it has already received from the Reserve Bank of India (RBI).
Promoter entity IndusInd International Holdings Ltd. (IIHL), based in Mauritius, said the plan had already secured nods from both the Reserve Bank of India (RBI) and the bank’s board. “However, we understand that the said resolution in the IndusInd Bank AGM held today was not carried through, although the proposed resolution complied with the applicable laws and governance practices,” IIHL President and CEO Moses Harding said in a statement. He added that the rejection may have stemmed from “misinterpretation,” and the group would work with shareholders to address concerns.
While investors blocked the board expansion plan, they cleared the appointment of Rajiv Anand as Managing Director and CEO, a move seen as vital for steering the bank through its recovery after stress linked to past frauds.
IIHL emphasized that it has supported the bank through “multiple business and regulatory cycles.” Its stake in IndusInd Bank, once above 90% at the time of the bank’s founding in 1994, has been cut to about 15% in line with RBI’s ownership and governance rules. The promoter has now sought approval from the regulator to raise its holding to 26%, in line with recommendations from the RBI’s Internal Working Group.
