In April, Religare Enterprises agreed to sell its stake in California-based private equity and venture capital firm Northgate Capital to The Capital Partnership, an independent asset manager. Religare, which had acquired Northgate for $200 million in 2010, is seeking shareholder approval for the deal through a postal ballot. But, it has not disclosed the key terms of the sale such as valuation and price.
Proxy advisory firm Stakeholders Empowerment Services (SES) has recommended that shareholders vote against the divestment citing \"governance concerns regarding non-disclosure of Sale Consideration, Buyer, Valuation Report, Independent Fairness Opinion Report and Total lack of transparency.\" The proxy firm has also opposed the company's resolution on appointment and remuneration of its chairman and managing director Sunil Gondhwani. The postal ballot closes on Saturday.
In its report SES said, "The company is seeking shareholders to approve the transaction without disclosing the relevant material information. This amounts to asking shareholders to sign on blank sheet. Therefore, SES recommends that shareholders vote AGAINST the resolution."
A Religare spokesperson said,"We cannot comment on observations made by SES. They are an independent body and are entitled to their point of view."
The spokesperson added, "With regard to our strategic exits in Landmark and Northgate as mentioned in our disclosures to regulators and the stock exchanges we have explicitly stated that the confidentiality clauses of our agreements with the buyers (details of buyers disclosed) don't allow us to disclose the consideration amounts in the public domain."
However, if there is any specific query from regulators and other authorities who would want to seek more details on this we would be happy to disclose details one on one, on a case to case basis, the company said.
SES observed that remuneration proposed for Godhwani did not have any variable component. It was of the opinion that the directors' performance should be benchmarked against the individual's target as well as company's overall performance, and therefore the remuneration paid to executive directors should be aligned with both the targets and thus should include a variable performance based component.
Further, it drew attention to shareholders that the company proposes to appoint Godhwani as the chairman and MD. "As a good corporate governance practice, these two positions should be separated in order to avoid concentration of power in a single person. Additionally, the Resolution for appointment is clubbed with approval of remuneration. SES is of the view that the two issues must be approved separately. Therefore, SES recommends that the shareholders vote AGAINST the resolution," SES said.
On Godhwani's reappointment and remuneration, Religare said, "in his role as the Executive Chairman and Managing Director is the man behind the vision, strategic guidance, governance for all Religare operating businesses. Given the width of his role and also the depth and versatility of his rich experience of more than 30 years he continues to be the torchbearer for Religare's journey."
As the CMD in an executive capacity he has always believed in leading from the front and continues to do so with full responsibility and accountability to all stakeholders for all our operating businesses, the Religare spokesperson said.
Religare added that it did not believe in concentration of power and in fact has consciously worked towards creating a culture based on transparency, ethics and teamwork. "Currently all businesses are managed by their respective operating CEOs who in turn work directly with the CMD thus ensuring a lean and efficient, cohesive operating structure," the spokesperson added.
Proxy advisory firm Stakeholders Empowerment Services (SES) has recommended that shareholders vote against the divestment citing \"governance concerns regarding non-disclosure of Sale Consideration, Buyer, Valuation Report, Independent Fairness Opinion Report and Total lack of transparency.\" The proxy firm has also opposed the company's resolution on appointment and remuneration of its chairman and managing director Sunil Gondhwani. The postal ballot closes on Saturday.
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In its report SES said, "The company is seeking shareholders to approve the transaction without disclosing the relevant material information. This amounts to asking shareholders to sign on blank sheet. Therefore, SES recommends that shareholders vote AGAINST the resolution."
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A Religare spokesperson said,"We cannot comment on observations made by SES. They are an independent body and are entitled to their point of view."
The spokesperson added, "With regard to our strategic exits in Landmark and Northgate as mentioned in our disclosures to regulators and the stock exchanges we have explicitly stated that the confidentiality clauses of our agreements with the buyers (details of buyers disclosed) don't allow us to disclose the consideration amounts in the public domain."
However, if there is any specific query from regulators and other authorities who would want to seek more details on this we would be happy to disclose details one on one, on a case to case basis, the company said.
SES observed that remuneration proposed for Godhwani did not have any variable component. It was of the opinion that the directors' performance should be benchmarked against the individual's target as well as company's overall performance, and therefore the remuneration paid to executive directors should be aligned with both the targets and thus should include a variable performance based component.
Further, it drew attention to shareholders that the company proposes to appoint Godhwani as the chairman and MD. "As a good corporate governance practice, these two positions should be separated in order to avoid concentration of power in a single person. Additionally, the Resolution for appointment is clubbed with approval of remuneration. SES is of the view that the two issues must be approved separately. Therefore, SES recommends that the shareholders vote AGAINST the resolution," SES said.
On Godhwani's reappointment and remuneration, Religare said, "in his role as the Executive Chairman and Managing Director is the man behind the vision, strategic guidance, governance for all Religare operating businesses. Given the width of his role and also the depth and versatility of his rich experience of more than 30 years he continues to be the torchbearer for Religare's journey."
As the CMD in an executive capacity he has always believed in leading from the front and continues to do so with full responsibility and accountability to all stakeholders for all our operating businesses, the Religare spokesperson said.
Religare added that it did not believe in concentration of power and in fact has consciously worked towards creating a culture based on transparency, ethics and teamwork. "Currently all businesses are managed by their respective operating CEOs who in turn work directly with the CMD thus ensuring a lean and efficient, cohesive operating structure," the spokesperson added.