Ice-cream-maker Vadilal Industries Limited is undergoing top level changes with its Chairman Rajesh Gandhi resigning amid regulatory compliance requirements.

The Board of Directors of the company has appointed Vijay Shah — currently an independent director on the Board — as a replacement for Gandhi.

However, being the promoter of the company, Gandhi continues to be on the board as non-executive, non-independent director. Vadilal Industries shares ended positive at ₹536 apiece — up over 4 per cent on the BSE.

The changes at Vadilal’s top level come as a fall-out of the resignation by two independent directors on June 19. At the meeting held on Monday (July 22), the board clarified on the exit of the two independent directors, Malay Mahadevia and Jignesh Shah. In their resignation letters, Shah and Mahadevia had raised issues of ‘hostile atmosphere’ at the meetings of the Board and Committees at the Company, finding ‘it impossible to carry out the functions as independent director.’

SEBI norms

A statement from Vadilal Industries said that the company had eight directors on the board, out of which four were independent directors.

Following the resignations of two independent directors, the board strength was reduced to six.

Hence, to comply with the SEBI regulation of Section 17(1) of Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015, there has to be minimum three independent directors under the chairmanship of Rajesh Gandhi, who has only two independent directors now under him.

Therefore, he resigned from the post of Chairman of Vadilal Industries.

Board meet

Meanwhile, Vadilal Industries has convened a board meeting on July 27, to consider and approve the Annual Audited Standalone and Consolidated financial results for the quarter and year ended on March 31, 2019.

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