Sterling & Wilson Solar shareholders approve reappointment of Pallon Mistry

Resolution pertaining to material related-party transactions also approved

Disregarding the advice of proxy advisory firms to vote against proposals recommended by the company, shareholders for Sterling & Wilson Solar (S&W Solar) approved the reappointment of Pallon Mistry, according to data shared with the exchanges on Friday.  

The company held its annual general meeting on September 30 and put to vote seven resolutions, including adoption of accounts and reappointment of Mistry.  

A week before the meeting, proxy advisory firm InGovern had asked shareholders to vote against four of the seven resolutions, including the one on reappointing Mistry as director and Keki Elavia as an independent director.

According to data released by the company, 98.35 per cent of the voting rights were in favour of Mistry’s re-appointment.

On this matter, the advisory firm had said, “… hold Mistry, as an interested related party director, responsible for the non-repayment of the loans availed by the promoter shareholders.”

InGovern had also raised concerns over re-appointment of Elavia. S&W Solar in its statement to BSE said 97.73 per cent of the voting rights were in favour of his re-appointment.

For adoption of the company’s annual accounts, Friday’s statement shows that 99.08 per cent of voting rights were in favour. The resolution pertaining to material related party transactions was also approved with a majority of 77.26 per cent voting in favour.

In a statement to the stock exchanges on September 26, the company had given a rebuttal to InGovern’s concerns. On its annual accounts, S&W said it had obtained independent opinions from two counsels that there was no non-compliance with any laws and regulations. 

“The company has also filed statement on impact of audit qualifications (for audit report with modified opinion) submitted along with annual audited financial results, wherein it has given its estimate of NIL impact of the audit qualification,” the company said.

“The financial statements are hence completely accurate as well as give a true and fair view, since in the view of the management, there is no impact on account of this modified opinion, which has also been vetted by the legal counsels,” it said, asking shareholders to clear the resolution.

On the related-party transactions, the company said the group flagship, SPCPL Group, through its various group companies is involved as a developer in several solar parks both inside and outside India as well as an EPC contractor for several hybrid energy projects.

“The company bids for these contracts on arm’s length basis and has been successful in winning and executing several of these over the past years. In addition, wherever the company does not possess the required pre-qualification in terms of tender requirements, SPCPL and/or its group companies become a consortium member to enable the company to participate in the bids jointly,” the company told its shareholders.

Such transactions with SPCPL and its group companies include receipt of income from works contracts and purchase of various services. To enable the company to capitalise on all possible growth opportunities and to avoid the possibility of not being able to participate in a bid on account of the value of such transaction crossing the limit under law, it has been proposed to keep a higher limit so that the company can capitalise on such business opportunities, it said.

Furthermore, to clarify the question on the inclusion of loans in related-party transactions, the company said it is barred from extending any loans to group companies of SPCPL from the date of listing of the company’s equity shares according to the provisions of Article 25A of the Articles of Association of the company.

The promoters have defaulted on loans taken from S&W Solar and the company decided to extend the tenure of the loan by a year by charging higher interest.