Pressure groups working to safeguard the interests of shareholders feel that Suzlon Energy should neither reappoint Tulsi Tanti as its Chairman nor should it consider a revision in his remuneration.
They have advised the shareholders to vote against these points in the postal ballot.‘Failed to perform’
Advising the shareholders in this regard, the proxy advisory firms are of the view that the company, which went into a $1.8-billion corporate debt restructuring (CDR) programme last year, has failed to perform during Tanti’s leadership. Suzlon Energy is the world’s fifth largest wind turbine supplier.
Delhi-based Institutional Investor Advisory Services in a report has said any increase in Tanti’s compensation is likely to adversely impact the company’s financial performance. It has also questioned the proposal to raise the borrowing limit to ₹20,000 crore from ₹10,000 crore as the company is already under a CDR scheme.
Shriram S, founder of proxy advisory firm InGovern said, “Suzlon continues to be a company with scant regard for shareholders and continues to survive on debt. The company continues to have operating losses. Only if the promoters and management change will the company have any chance of survival.”
He also said the shareholders should vote against the increase in remuneration for its Managing Director Vinod Tanti to ₹2.5 crore from ₹1.2 crore.Unsecured loan issue
Besides, some other issues raised by InGovern were the conversion of promoters’ unsecured loan of ₹45 crore to equity shares, which have effectively increasing their shareholding, and the constitution of the Employee Stock Purchase Scheme 2014, which has further dilutes the power of the current shareholders. “Only public sector banks and LIC seem to be institutional owners of Suzlon stock,” Sriram added.
JN Gupta, founder of Mumbai-based SES, said, “Rather than owning responsibility and feeling sorry for loss to investors they are planning to enrich themselves. Purely on this logic we have opposed their appointment.”
The firm has, however, not advised for a change in the management as it feels “advisory firms cannot ask for the same unless they have sufficient information and road map to take the company out of the woods.”
Gupta further said that as the banks had approved the company’s CDR under Tanti’s chairmanship, they are in a better position to decide whether there should be any change in the top management.
“We can only voice our concern. Toppling management is not on our agenda unless there is sufficient information in the public domain which warrants such an advisory,” he added.