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In a curious case involving corporate governance at a State-owned company, the chairman of Dredging Corporation of India Ltd (DCI) abstained from voting on an annual general meeting resolution to approve the appointment and remuneration of GYV Victor, the managing director and CEO of the dredging company.
K Rama Mohana Rao, the chairman of DCI, is also the chairman of Centre-owned Visakhapatnam Port Authority, the largest shareholder among the four major ports that own a combined 73.47 per cent stake in India’s biggest dredging contractor listed on the Bombay Stock Exchange.
In a strategic disinvestment deal, Visakhapatnam Port Authority, Paradip Port Authority, Jawaharlal Nehru Port Authority and Deendayal Port Authority together acquired the Central government’s 73.47 per cent stake in DCI for ₹1,056 crore in March 2019.
Visakhapatnam Port owns 19.47 per cent stake (representing 54,51,710 shares) in DCI, while Jawaharlal Nehru Port Authority, Deendayal Port Authority and Paradip Port Authority owns 18% stake each in the Visakhapatnam-based company.
The development is curious because Rama Mohana Rao is the chairman of the board that “unanimously” approved the appointment of Victor as MD and CEO from 01 March 2021.
But, Rama Mohana Rao “abstained” from voting on a shareholders resolution to confirm the appointment and remuneration of Victor for a five-year term at the annual general meeting (AGM) held on December 17, according to a copy of the AGM proceedings filed by DCI with the Bombay Stock Exchange.
“This is an interesting corporate governance issue that the representative of Visakhapatnam Port Authority (being the largest shareholder of DCI) has taken a stand contrary to his own decision earlier as chairman of the board (in selecting Victor) and also without an approval or resolution from the board of Visakhapatnam Port Authority or a direction from the Ministry of Ports, Shipping and Waterways which controls the major ports, to abstain from voting,” said an official with a proxy advisory firm. “It’s unheard of in India incorporated,” he added.
Despite the embarrassment, Victor’s appointment and remuneration sailed through effortlessly with the requisite majority. Among those who voted in favour were the other three shareholders representatives from Jawaharlal Nehru Port Authority, Deendayal Port Authority and Paradip Port Authority.
Rama Mohana Rao did not respond to an email seeking comment. DCI declined to comment on the development.
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