Former CAG Vinod Rai fails to get re-elected on IDFC Board

Over 62% IDFC shareholders reject appointment of Vinod Rai as non-independent, non-executive director

Vinod Rai has failed to secure a place on the Board of IDFC Ltd as 62.28 per cent votes from shareholders were against his nomination as director till May 22, 2023. The name of Rai, former Comptroller and Auditor General of India (CAG), was proposed for the position of non-executive and non-independent director on board.

IDFC, in a BSE filing, said Item no 5 of the notice – an ordinary resolution (appointment of Rai as director) -- has not received the requisite votes and hence does not stand passed. The number of votes in his favour were 37.11 per cent. The ordinary resolution needs 50 percent for its passage. Its shares closed 2.02 per cent higher at Rs 55.65 per share on BSE.

Shareholders passed resolution approving the financial statement for 2020-21, appointing statutory auditor and their remuneration and appointment of two independent directors– Jaimini Bhagwati and Anil Singhvi. They also passed a proposal for Payment of Commission to Non-Executive Director.

Last week at investors' call, ahead of the annual general meeting scheduled on September 22, IDFC Ltd management had come in for sharp critique from investors over long delays in divestment of stake in assets, including the bank and mutual funds. There was also no clarity on meeting timelines for the merger of some of the entities.

Addressing investors, Rai as chairman had said the company had a very complex corporate structure. The three main entities are a non-operating financial company, IDFC Projects, and IDFC Foundation. The non-operating entity has various financial services businesses, including a bank and finance company. IDFC Ltd holds 36.5 per cent stake in IDFC First Bank, according to BSE filings.

Investor advisory firm IiAS, in a report, had said he is an independent director, and his second term was set to expire on 30 July 2021. However, he resigned as an independent director and was reappointed as a non-executive and non-independent director of the company from May 25, 2021.

While Vinod Rai meets the fit and proper criterion his resignation letter has not been filed with the stock exchanges, which is a mandatory requirement. “We note that Vinod Rai has been a member of the Nomination and Remuneration Committee since 2015,"  IiAS said.