The Shareholder Rights and Activism Review: India
Historically, certain particular features of the Indian market have affected shareholder activism. First, there has been little separation of ownership and management. Many Indian listed companies are controlled by 'promoters' (i.e., their original founders) and the interests of the public shareholders have often been subordinated to those of the promoters. Second, until recently, hostile takeovers have been rare and promoters have previously operated with little fear of a non-consensual change of control. Third, the institutional investor base in India is not as organised as in the United States or the United Kingdom and has traditionally been passive. However, a number of developments over the past decade have changed certain market dynamics and have diluted a number of traditional promoter strengths. These factors have given rise to a nascent form of shareholder activism in India, and there have been a number of instances of shareholders successfully challenging promoters and management.
These developments include changes introduced in the Companies Act 2013 (CA 2013) and various regulations issued by India's securities markets regulator, the Securities and Exchange Board of India (SEBI). These have improved corporate governance standards, enhanced minority shareholder rights, created new shareholder remedies and codified directors' duties. Also, proxy firms are now active in the Indian market and investors have become more adept at using the media. In addition, many promoters have been weakened as a result of their over-leveraged position and the advent of a new insolvency regime in India. In certain situations, the exercise of share pledges by lenders has diluted the promoters' control. There have also been two recent high-profile contested and hostile public M&A transactions. Finally, international activist funds have started to invest in various Indian listed companies.
Therefore, although shareholder activism is nascent in comparison with the United States and the United Kingdom, it is clear that Indian promoters can no longer take their shareholders for granted.
Legal and regulatory framework
i The ability of shareholders to appoint and remove directors
In India, directors are appointed by shareholders, just as they are in many other common law jurisdictions. However, there is no mandatory annual re-election requirement for directors of public companies (whether listed or otherwise). Independent directors are appointed for a term of up to five years,2 and, absent any special provisions in the articles (which are uncommon), one-third of all non-independent directors are subject to retirement and re-election by rotation every year.3 This contrasts with the position in England and Wales, where the requirement under the UK Corporate Governance Code on a 'comply or explain' basis for all FTSE 350-listed companies to annually reappoint directors serves as a powerful governance tool to keep directors in check. However, in the recent past, there have been a number of instances where investors have been more active with regard to the appointment and removal of directors of listed companies (see Section IV iii).
In addition to the traditional board appointment route discussed above, an investor can also seek board representation as a 'small shareholder' by acquiring a small number of shares and then petitioning the company with the support of the lower of 1,000 other small shareholders or 10 per cent of the total number of small shareholders.4 In August 2017, Unifi Capital, attempted to seek the appointment of such a small shareholder director on the board of Alembic.5 Although the board successfully resisted this (the small shareholders were allegedly clients of Unifi Capital), this indicates that activists are thinking creatively about board representation.
The removal of a director prior to expiry of his or her term normally requires an ordinary shareholders' resolution (i.e., approval by a simple majority), and the director must first have been given an opportunity to be heard.6 In May 2018, institutional investors and certain funds removed a director of Fortis Healthcare in this manner (see Section IV). This is perhaps the first example of an activist campaign leading to changes on the board.
There is also currently no impediment to companies removing additional responsibilities or designations conferred upon directors. This issue attracted attention in the recent corporate leadership tussle in Tata Sons (see Sections III and IV), where the company's articles did not require shareholder approval for the removal of the incumbent from his role as chair of the board (although the removal of his directorship required shareholder approval).
ii Control over executive remuneration
Shareholders have voted down executive remuneration packages in a number of instances. In 2018, shareholders rejected the compensation of Neeraj Kanwar (managing director and promoter of the Apollo Group), leading to a 30 per cent reduction in his compensation, which was subsequently approved. Other instances include the rejection of executive remuneration resolutions in Tata Motors' annual general meeting in 2014 and the withdrawal of executive remuneration resolutions by Seamac and ARSS Infrastructure in 2011.7 In 2017, Infosys, one of India's leading IT companies, was criticised by its founders for the levels of severance payments made to exiting executives (see Section IV).8
Also, the alignment of incentives and compensation in financial institutions is now an area of regulatory focus. In November 2019, the Reserve Bank of India published guidelines governing compensation in private sector banks. These guidelines stipulate committee requirements and requirements to balance fixed and variable compensation, and have introduced clawback provisions.
There has also been one instance of a private bank (ICICI Bank) seeking to claw back past compensation from a former CEO following allegations of wrongdoing.
iii The ability to requisition shareholders' meetings and postal ballots
Shareholders holding at least one-tenth of voting paid-up share capital can notify the board to requisition an extraordinary general meeting (EGM),9 and if the board does not call the EGM within 21 days of the requisition notice, the shareholders may themselves call the EGM (to be held within three months).10 If the directors fail to convene an EGM following a valid requisition notice, they become liable for any requisition-related expenses.11 Although a useful tool for activists, ironically, the requisitioning of an EGM has also been used in one case to strengthen the promoter's position by removing certain directors (see Section III.i).
Indian company law does not expressly provide shareholders the ability to pass written resolutions, but there are provisions permitting postal ballots.12 In 2017, a public shareholder sought appointment as a non-executive director unsuccessfully through electronic voting (see Section IV.iv).
iv Shareholders' influence over corporate strategy
Under Indian company law, directors are delegated the authority to manage company affairs, subject to the satisfaction of their duties. Public campaigns by third parties to encourage a change of strategic direction are uncommon, but shareholders do have certain powers to keep management and promoters in check.
Although there is no Indian equivalent as comprehensive as the 'class tests' under the UK Listing Authority's Listing Rules, the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (the Listing Regulations) require shareholders' special resolutions (i.e., a 75 per cent approval threshold) for any disposal of a controlling interest in a 'material subsidiary' or any transfer of a significant portion of the subsidiary's assets.
Also, regardless of listing status, minority shareholders holding more than 25 per cent of a company's voting power can influence a number of transactions that are subject to special resolution approval requirements. These include the issue of new shares13 by all companies, public or private, on a non-preemptive basis (which will affect non-cash consideration in M&A transactions), any transfer of an undertaking by a public company14 (which is the most direct statutory control over M&As) and any borrowing by a public company in excess of that company's paid-up share capital, free reserves and securities premium (which will affect the financing of M&A transactions).15
Finally, the Listing Regulations do set out certain principles that have relevance in an activist context, including the rights of shareholders to 'participate in, and to be sufficiently informed of, decisions concerning fundamental corporate changes' and a principle requiring the 'protection of minority shareholders from abusive actions by, or in the interest of, controlling shareholdings either directly or indirectly, and effective means of redress'. These principles have not been used by activist shareholders, but boards of listed companies do need to be wary of potential investor complaints to SEBI in the future.
v The position of shareholders and boards in public M&A situations
In theory, Indian law confers considerable power on minority shareholders in public M&A situations. There are restrictions on the board taking frustrating action18 and so defences such as poison pills are difficult to implement. In addition, although there is no formal obligation under Indian takeover regulations to treat shareholders equally in a bid situation, equality of treatment is a guiding principle under the Listing Regulations, and so it would be difficult for a target to provide selective information to certain bidders.19
Also, just as in England and Wales, M&A transactions can be structured through court schemes, which need to be approved by a majority of shareholders holding 75 per cent in value of the shares.20 In contrast with England and Wales, there is no practice of obtaining irrevocable undertakings in the Indian public M&A market, so there is no further segregation of classes of shares (beyond the classes that already exist). Therefore, shareholders holding just over 25 per cent will be able to block a scheme.
Despite the availability of these rights, hostile takeovers have historically been rare. However, 2018 saw a contested public M&A transaction involving Fortis Healthcare, in which shareholders succeeded in removing a director (see Section IV). More recently, in 2019, Larsen & Toubro completed a hostile offer for Mindtree. These are encouraging signs.
vi Legal remedies available to shareholders
The advent of CA 2013 is perceived as having significantly improved shareholders' legal remedies in India. Although it is true that new remedies have been created, the lengthy nature of the litigation process in India and the judicial history of enforcing shareholder rights should temper expectations.
CA 2013 provides for the ability of minority shareholders to claim relief against oppression and mismanagement by the majority on the ground that the company's affairs are being conducted in a prejudicial manner, and the ability of shareholders with the support of at least 100 members, or shareholders holding 10 per cent voting power, to apply to the National Company Law Tribunal (NCLT) in certain circumstances to seek an investigation.21 However, cases on oppression and mismanagement under the preceding company law (CA 1956) indicate that claimants have historically found success difficult.22 Such claims are also likely to be resisted by management (see Sections III and IV on the Tata Sons affair). Therefore, even if shareholders initiate such action, they may need to tactically consider whether settlement might offer advantages over a lengthy litigation process.23
Also, CA 2013 has introduced a 'class action' concept in Indian company law.24 Shareholders holding a threshold level of shareholding25 can institute class action suits if they believe that the company's management or affairs are being conducted in a manner that is prejudicial to the interests of the company or its shareholders. The NCLT has the power to issue a broad range of directions and can also order damages. This moves Indian company law away from the restraints of the exceptions to the rule in Foss v. Harbottle.26 However, given the state of the litigation process in India, the effectiveness of this remedy remains to be seen.
vii Other issues
Similar to other jurisdictions, shareholders need to be aware of insider dealing concerns when engaging with a listed company, under the SEBI (Prohibition of Insider Trading) Regulations 2015, as well as the SEBI regulations restricting manipulative, fraudulent and unfair dealings in shares.
With regard to 'concert party' issues, these have been less relevant in India in comparison to other jurisdictions. The test of 'concertness' under Indian takeover regulations is by reference to a common objective to acquire shares or voting rights in, or control over, a listed target and shareholders rarely come together for this purpose in India (they usually cooperate on corporate actions requiring shareholder approval).
Finally, although companies do not have a general obligation to provide investors with details of specific shareholders' holdings, companies do need to maintain a register of members that is available for inspection.27 As far as listed public companies are concerned, certain significant acquisitions and disposals do need to be reported to the market and there are periodic disclosures of promoter positions. In addition, like other jurisdictions, Indian company law has recently introduced the concept of a register of significant beneficial owners, which shareholders are able to inspect.28
Key trends in shareholder activism
These are still very early days for shareholder activism in India but some initial trends are summarised below.
i Fissures in corporate India
The rise of shareholder activism in India has coincided with succession issues, over-leveraged balance sheets and other issues that have made promoters and professional management of listed companies vulnerable. These have even affected companies with a better governance history.
For instance, in late 2016 and 2017, Infosys, a US and Indian listed IT company with a good governance reputation, faced a period of sustained pressure from its original founder shareholders, which ultimately contributed to the resignation of its CEO. The founders criticised the level of severance payments paid to certain departing executives and the US$200 million Panaya acquisition, which led to an investigation by an international law firm (which reportedly exonerated the management team). Following this, in July 2017, the board of Infosys indicated its willingness to work with its founders. However, on 18 August 2017, Vishal Sikka, the incumbent CEO, resigned. Without naming the founders, he indicated that the criticism he faced made his role untenable.
The Tata conglomerate was also subject to a battle for control in late 2016 and early 2017. Following differences between Cyrus Mistry, then chair of Tata Sons, and Ratan Tata, the former chair, on 24 October 2016, Cyrus Mistry was removed from his position as chair through a board resolution. This was followed by allegations and counter-allegations between the two individuals. Cyrus Mistry was removed as director from the various Tata Group companies between November and December 2016 and, ultimately, was removed as a director of Tata Sons pursuant to an EGM held on 6 February 2017, although this removal is still being litigated.29
ii Litigation v. other strategies
Historically, litigation strategies have proved to be less effective. For instance, the litigation strategy employed by the Children's Investment Fund (TCI) against the directors of Coal India for breach of fiduciary duties between 2012 and 2014 did not meet with success. In 2014, TCI withdrew its court claims and sold its Indian holdings. Equally, recent attempts by Cyrus Mistry, the deposed chair of Tata Sons, to seek relief under Sections 241 and 244 of CA 2013 (for oppression and mismanagement) were dismissed by the NCLT,30 and the Bombay High Court refused to entertain a separate representative suit against Ratan Tata (Cyrus Mistry's predecessor) for damages.31 Similarly, litigation by minority shareholders of Cadbury in relation to the valuation in a minority squeeze-out scheme failed as the court ruled against the minority shareholder group.32 A more effective technique that certain shareholders have used is to register complaints with regulatory authorities. For instance, in July 2019, the shareholders of Bharat Nidhi Limited objected to a share buy-back scheme and asked SEBI to investigate.33
Given that promoters still remain powerful, the more effective strategies are likely to be those that involve investors working with the promoters or seeking to curb obvious abuses, for which there is likely to be greater institutional investor and regulatory support (see Section IV).
iii Proxy firms
Several proxy advisory firms are now active in India and are regulated by SEBI under the SEBI (Research Analysts) Regulation 2014.34
Proxy advisory firms recommended that shareholders vote against the Tata Motors executive remuneration resolutions in 2014 and claimed credit for the outcome.35 They have also been vocal on governance matters; for instance, in commenting on the leave of absence taken by the CEO of ICICI Bank (while allegations of impropriety are investigated). More recently, in 2019, proxy firms challenged the management of Sterling Wilson over the failure to repay debt out of its IPO proceeds.
They do not have the same level of influence as in the United States but proxy firms are emerging as important market participants.
However, these firms have also faced criticism around perceptions of their own conflicts of interest And, in 2019, SEBI recommended safeguards in this regard (see Section V).
iv Role of the media
Although public campaigns by shareholders seeking strategic changes are uncommon,36 the media has emerged as a key player, for instance, in the engagement that Narayana Murthy, a founder of Infosys, had with its board in 2016 and 2017 (see Section IV.i).
v Greater investor participation
In the past, collective action issues held back shareholder activism, with investors preferring to simply exit their investments. However, mutual funds and other long-term investors in the Indian market now more actively engage with promoters (see Section IV). Part of this has been driven by regulation. Indian regulated mutual funds are now required by SEBI to vote on resolutions involving their portfolio companies and provide voting reports on a quarterly and annual basis.37 Efforts by India's insurance regulator to encourage market engagement by insurance companies (as summarised in Section V) are likely to continue this trend.
In addition to long-only investors, certain funds have sought to take activist positions in various listed companies, seeking board appointments (albeit unsuccessfully) and successfully removing a director (in the case of Fortis Healthcare). In 2019, the asset sale of the Leela Hotels to Brookfield was challenged by ITC, a non-financial investor, and Life Insurance Corporation, a state owned insurer, on the grounds that certain deal participants were related parties and hence could not vote in favour of the sale. This challenge and its subsequent appeal were dismissed, but it does illustrate that the extent of shareholders asserting their rights has now expanded.
Recent shareholder activism campaigns
i Blocking transactions
There have been a number of instances where shareholders have been able to block transactions adverse to the shareholders' interests.
Since shareholders with an interest in related party transactions cannot vote to approve them, minority shareholders can sometimes be strongly placed. For instance, in 2018, shareholders of Tata Sponge Iron Limited, holding just 3.77 per cent of the votes, were able to defeat the related party approval resolutions for this reason. Also, in July 2017, the shareholders opposed a related party transaction between Raymond Limited and its promoters (involving the sale of an asset at a significant undervalue). More than 97 per cent of the votes cast were against the transaction.38
Similarly, in November 2015, after pressure from its shareholders, Sun Pharma withdrew from a potential US$225 million investment in the United States.39
Finally, in 2016, HDFC Standard Life Insurance Company Limited and Max Life Insurance Company Limited announced a merger to create a new insurer and the deal terms included the payment of a 8.5 billion rupee non-compete fee to one of the promoters. Ultimately, the deal did not complete owing to regulatory concerns, but various proxy firms had strongly opposed the payment of this fee.
ii Forcing renegotiation of terms
In certain cases, shareholders have been able to force a renegotiation of terms in large transactions.
In 2014, Maruti Suzuki's proposed manufacturing contract with a shareholder, Suzuki, was criticised for failing to seek shareholder approval for the transaction. Some of the largest funds in India wrote a letter to Maruti Suzuki challenging the proposed transaction. Even Life Insurance Corporation of India, a state-owned insurer, not known for activism, reportedly engaged with the company.40 The transaction terms were modified, and the company ultimately did obtain shareholder approval as a related party transaction matter, in 2015.
Similarly, in August 2014, the shareholders of Siemens India voted down the proposed sale of its metal technologies business to Siemens AG. Siemens India amended the terms of the transaction to increase the sale price41 and finally obtained shareholder approval in December 2014.
In the public M&A context, minority shareholders threatened to challenge a mandatory share swap scheme (announced in December 2019) between Reliance Industries Limited (RIL) and Reliance Retail Limited, on the basis that they had not been provided an exit option. In January 2020, as a result of this shareholder opposition, RIL made this scheme optional.
iii Changes to board composition
Investors have had one notable success in removing a director of Fortis Healthcare in May 2018.42 This was in the context of investor concerns as to the board assessment of certain bids for the company, so this is a significant shareholder activism landmark in India. Also, in 2019, the board of CG Power and Industrial Solutions removed its promoter from his role as chairman (although this was not the removal of a directorship)43 in the wake of allegations of certain irregularities.
However, the question is whether attempts to change the composition of the board outside the particular circumstances set out above will work. In the past, this has not proved easy in practice. For instance, the attempt of a 20 per cent investor to seek board representation in relation to MRO-TEK and the attempt by Florintree Advisors to seek a seat on the board of PTC India did not succeed. Some investors have persisted in unusual ways, such as the provisions for a 'small shareholder' director by Unifi Capital (see Section II).44
In certain cases, shareholders have opposed the reappointment of senior incumbent management as directors. For instance, in July 2018, 22.64 per cent45 of the shareholders of HDFC Limited voted against the reappointment of Deepak Parekh, the group chair, as a director. Similarly, in September 2018, a significant number of investors opposed the re-election of Kumar Mangalam Birla (head of Aditya Birla Group) to the board of UltraTech Cement.46 Although both reappointments were ultimately approved, this scale of opposition in relation to such senior figures in corporate India is noteworthy.
Litigation has also occasionally been attempted as a strategy to force a change in board composition, although these are harder to achieve.
Four regulatory developments are likely to have a bearing on shareholder activism in India going forward.
First, in March 2017, the Insurance Regulatory and Development Authority of India published its Stewardship Code relating to investments by insurance companies in listed securities. These require insurers to have a clear engagement strategy (of their own choosing) with listed companies. There are also other principles requiring insurers to have a policy on collaborations with other institutional investors and also to have a clear voting policy. These are likely to encourage insurers to be more engaged.
Second, SEBI is implementing a number of recommendations of the Kotak Committee (constituted in June 2017, which has suggested various reforms to improve the governance of listed companies, among others). This should have a positive impact on the corporate governance landscape.
Third, the Indian Finance Minister in her budget speech in July 2019 suggested that SEBI consider a public float threshold of 35 per cent (rather than the current 25 per cent). Although this development would increase the influence of activist shareholders, it has not yet been implemented.
Fourth, on 29 July 2019, SEBI published recommendations on the further regulation of proxy firms. SEBI appears to be in favour of a 'light touch' approach. For instance, with regard to conflict situations, the emphasis is on disclosure and self-regulation through 'Chinese Walls'. SEBI has also raised the prospect of a UK-style 'stewardship code' and has recommended a code of conduct for proxy firms, in both cases, on a 'comply or explain' basis. SEBI is also considering making the principles around the fiduciary duties of proxy firms more explicit. The proposed changes, if implemented, will improve transparency, but it remains to be seen whether they prove to be sufficiently robust in the Indian context.
Although nascent, shareholder activism in India is evolving quickly. Regulatory changes, increased levels of investment by global financial investors and the financial distress among a number of promoter groups are driving change. In addition, there is some evidence that international activist investors are starting to engage with some listed companies in India.
So far, most activism has been event-driven (opposing related party transactions, share repurchases and acquisitions) and in relation to the larger listed companies, but it has also broadened to cover executive remuneration, strategy, succession planning and abuse of position. It remains to be seen as to whether this will develop further to 'US style' challenges to corporate strategy, with activists driving change to enhance shareholder value.
Boards of Indian listed companies will also need to improve their shareholder engagement by setting up investor relations teams, improving their governance and regularly engaging with key shareholders. Corporate India will need to adapt to meet the challenge of activism.
1 Nikhil Narayanan is a partner at Khaitan & Co.
2 Section 149(10) of CA 2013.
3 Section 152(6)(c) of CA 2013. There is also a rarely used alternative in Section 163 of CA 2013, which allows for the concept of proportionate representation for at least two-thirds of the board.
4 Section 151 of CA 2013 and Rule 7 of the Companies (Appointment of Directors) Rules 2014. For these purposes, a 'small shareholder' is one who holds shares in a listed company, the nominal value of which is less than 20,000 rupees or any other government-prescribed sum.
5 Ingovern, India Proxy Season 2017.
6 Section 169(1) of CA 2013. The reference to 'normally' is because this does not apply to directors appointed by proportional representation (which is very uncommon).
7 Allirajan Muthsamy, 'Shareholder Activism stalls promoter moves', The Economic Times, 5 July 2014.
8 With regard to shareholder controls, Section 197 of CA 2013 and Regulation 17(6)(c) of the Listing Regulations both require compensation to be approved by shareholders if they exceed certain thresholds.
9 Section 100(2)(a) of CA 2013.
10 Section 100(4) of CA 2013.
11 Section 100 (6) of CA 2013.
12 Section 110 of CA 2013 and Rule 22 of the Companies (Management and Administration) Rules 2014.
13 Sections 62(1)(b) and 62(1)(c) of CA 2013. Private companies and the International Financial Services Centre public companies offering shares to employees under an employee benefits scheme need only pass an ordinary resolution (and not a special resolution).
14 'Undertaking' is defined as any undertaking in which the company's investment exceeds 20 per cent of the company's net worth (as of the audited balance sheet of the preceding financial year) or that generated at least 20 per cent of the company's total income during the preceding financial year.
15 Section 180(1)(c) of CA 2013.
16 Section 188 of CA 2013.
17 Regulation 23(4) of the Listing Regulations.
18 Regulation 26 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011.
19 In a board meeting of 27 June 2019, SEBI has recently permitted shares with superior voting rights in listed companies. This may open up an avenue for takeover defences, although there are a number of safeguards (such as a five-year sunset provision, limitation on the companies that can issue such shares and also restrictions on the use of superior voting rights in relation to related party contracts and other matters that SEBI may notify), which may limit their application in this context.
20 Section 230(6) and Section 232(1) of CA 2013.
21 Section 213 of CA 2013.
22 Umakanth Varottil, 'The Advent of Shareholder Activism in India', Journal on Governance, Vol 1 No. 6, 2012.
23 In 2019, minority shareholders of Associated Broadcasting Company challenged the sale of the company and the appointment nominees of the acquirer on the board, alleging oppression and mismanagement and the NCLT passed a restraining order. However, press reports suggest that, subsequently, a settlement occurred with SAIF Partners, a key minority shareholder, pursuant to which the transaction appears to have completed.
24 Section 245 of CA 2013.
25 The threshold for shareholders to be able to trigger this protection (i.e., a shareholding percentage) is the lower of 100 shareholders or a percentage of shareholders to be prescribed. Draft rules had proposed a 10 per cent threshold for this latter threshold, but this proposal is, at the date of publication, not yet in force.
26 (1843) 2 Har 361. CA 1956 did not recognise derivative action, so claimants needed to establish a case on the basis of common law. Academic studies have shown that this had little success (see note 21).
27 Section 88 of CA 2013.
28 Section 90 of CA 2013.
29 The National Company Law Appellate Tribunal issued an order in December 2019 restoring Cyrus Mistry to office, although the Supreme Court stayed this decision in January 2020. On 29 May 2020, Cyrus Mistry has initiated certain further challenges before the Supreme Court and thus the matter is still being considered by the Supreme Court as at the start of July 2020.
30 Cyrus Investment Private Limited and others v. Tata Sons Limited and others, (2017) 2 CompLJ 295; Cyrus Investment Private Limited and others v. Tata Sons Limited and others, (2017) 2 CompLJ 332; and Cyrus Investments Private Limited and another v. Tata Sons Limited and others, order dated 12 July 2018 of NCLT (Mumbai bench) in CP No. 82 (MB)/2016.
31 Pramod Premchand Shah and others v. Ratan N Tata and others, 2018 (1) ALLMR 255. Note that as at the start of July 2020, litigation with Cyrus Mistry continues in the Supreme Court as regards his removal.
32 Khushboo Narayan, 'Bombay HC asks Cadbury to pay Rs 2,014.50 per share for buyback', Livemint, 18 July 2014.
33 Subsequently, in January 2020, the Supreme Court ordered SEBI to complete the investigation in four months.
34 Proxy firms are required to register with SEBI, although certain foreign proxy firms are not required to do so. However, SEBI has recently recommended that foreign firms also follow a common code of conduct with domestic proxy firms on a 'comply or explain' basis (see Section V).
35 'Shareholders reject Tata Motors pay plan', The Business Standard, 4 July 2014.
36 The only real example was in 2012 when CLSA wrote to the then CEO of Infosys, challenging its business model, but that did not result in any meaningful change or shareholder engagement.
37 SEBI circulars SEBI/IMD/CIR No. 18/198647/2010 dated 15 March 2010; CR/IMD/DF/05/2014 dated 24 March 2014; and SEBI/HO/IMD/DF2/CIR/P/2016/68 dated 10 August 2016.
38 Ingovern, India Proxy Season 2017.
39 'Sun Pharma drops wind energy investment plan', Business Standard, 25 November 2015.
40 Himank Sharma and Aradhana Aravindhan, 'Big Indian funds challenge Maruti Suzuki over Indian Suzuki plant', Reuters, 24 February 2014.
43 He subsequently resigned from his non-executive directorship.
44 Ingovern, India Proxy Season 2017.