Fino Payments Bank holdco tweaks rule on voting day to eject bank chief

The resolution to reappoint Mahendra Kumar Chouhan and Punita Kumar-Sinha was voted down by 80% of shareholders, which included 100% of the promoter group

On April 29, Fino Paytech, the promoter company of Fino Payments Bank (Fino PB), decided to limit the tenure of independent directors for companies in the group to one term. The decision was taken on the same day the electronic voting (e-voting) for the reappointment of Fino PB chairman and other independent directors on the board came up.

All promoters of Fino PB, including Fino Paytech, voted against the resolution of the reappointment of Mahendra Kumar Chouhan who was an independent board member and also chairman of the board.

The promoter group also voted against the reappointment of Punita Kumar-Sinha — another independent director. The resolution to reappoint Chouhan and Kumar-Sinha was voted down by 80 per cent of shareholders, which included 100 per cent of the promoter group.

Both Chouhan and Kumar-Sinha completed one term of five years in the payments bank.

In the shareholders’ meeting, the promoter group also voted against an increase in authorised share capital of the bank and alteration of the capital clause of the memorandum of association of the bank. It also rejected the proposal on amendment to Fino PB Employee Stock Option Policy, 2020.

Fino PB said a postal ballot notice was sent to the bank’s shareholders for reappointments on March 29. The e-voting process started on March 31. It ended on April 29.

“According to the Companies Act, once resolutions are placed through e-voting, they cannot be withdrawn,” said Fino PB.

“To decide on the voting, Fino Paytech had a board meeting on April 29, where a policy decision was taken on the term of independent directors and it was followed,” it said.

The parent Fino Paytech, in a statement, said a policy decision was taken to not allow any independent director for more than one term to inject fresh talent.

“To introduce fresh talent and experience to meet the evolving challenges of the market, the board of Fino Paytech decided to limit the tenure of independent directors to one term. This policy decision is applicable to all companies in the group,” said Fino Paytech, while thanking the outgoing directors for their contribution.

Interestingly, Ashok Kini, chairman of Fino Paytech, was appointed independent director on March 31, 2015, for a period of five years. Clearly, Kini was reappointed after his term expired in 2020. Fino Paytech — holding company of the bank owning around 75 per cent stake — has investors like insurance behemoth Life Insurance Corporation of India, ICICI Bank, ICICI Lombard, Corporation Bank, Union Bank of India, Blackstone Group, Indian Bank, and others.

Chouhan is on the boards of various companies as an independent director across sectors, including banking, housing finance, education finance, and capital goods. He is also a consultant with IFC World Bank in corporate governance, has worked extensively in the fields of governance and sustainability.

Fino PB started operations in 2017 after it was granted licence by the Reserve Bank of India in 2015. Shares of Fino PB are currently trading 48 per cent below its initial public offering (IPO) price. The company had come out with a Rs 1,200-crore IPO in November 2021.

On Monday, the shares ended at Rs 302.25 apiece — 1.3 per cent higher than the previous close.