Indian mutual funds continue to remain largely passive and indifferent to governance issues of the companies in which they have invested.
A survey by proxy advisory firm InGovern found out that as investors, mutual funds abstained from voting in 51.5 of the resolutions at shareholders’ meetings or postal ballots in FY2012-13.
It said that two out of 43 mutual funds abstained from any voting activity during the year and have not made any voting disclosures.
Only 1.5 per cent of total resolutions put forth by investee companies in the last fiscal have been voted against by mutual funds. They have voted in favour of 47 per cent of the proposals.
InGovern noted that some of the mutual funds have disclosed their voting information “incorrectly” even in the third year of obligatory reporting.
However, certain level of participation by mutual funds was seen in resolutions that came under larger public scrutiny post negative recommendations from the firm.