Concerns raised by IiAS
One of the earliest cases IiAS took up was Akzo Nobel's (BSE: 500710 | NSE: AKZOINDIA | ISIN: INE133A01011) proposal to merge some privately owned companies with itself. Led by IiAS, institutional investors such as ICICI Prudential Life Insurance, Life Insurance Corporation (LIC) and UTI expressed their uneasiness with the deal as the private companies were valued steeply and this would have led to the promoter's stake going up in the listed entity after the merger. Though the company maintained that the deal added value, investors held their ground. Eventually, three days before a court-convened meeting of the shareholders, the company announced a buyback proposal to provide non-promoter shareholders with an exit option.[13]
IiAS also raised concerns over the sudden return of Narayan Murthy in 2013 to Infosys (BSE: 500209 | NSE: INFY | ISIN: INE009A01021) – one of India's most respected companies. Not only did Narayan Murthy return to Infosys, he came with his son Rohan Murthy. IiAS argued that Infosys had compromised the very principles it strongly advocated during its rise to the top: having a retirement age for directors (both executive and non-executive), and that founders’ children must not take up executive roles.[14][15] But, following an exodus of key management personnel, Infosys appointed Dr. Vishal Sikka as CEO and Managing Director in 2014. Narayan Murthy and Rohan Murthy (whose term was co-terminus with Narayan Murthy) stepped down from Infosys upon Dr. Sikka's joining the board. At the time of his appointment to lead Infosys, Dr. Vishal Sikka was possibly one of the highest paid professionals in India, with an estimated compensation (including restricted stock options) of around US$7.1 million. IiAS recommended that shareholders vote for Dr. Sikka's appointment and his remuneration.[16] IiAS reckoned that Infosys' decision to appoint Dr. Sikka must be looked at as an investment in its leadership that will bear returns in the future. Additionally, over 80% of his total remuneration, including restricted stock, was variable and based on target achievement.[17][18]
In 2013, IiAS opposed Holcim's plan to restructure its holdings in India – by changing the ownership structures of Ambuja Cements (BSE: 500425 | NSE: AMBUJACEM | ISIN: INE079A01024) and ACC (BSE: 500410 | NSE: ACC | ISIN: INE012A01025). By virtue of the restructuring, ₹3.5 bn would flow out from the Indian companies to Holcim, with non-promoter shareholders in both companies getting no piece of it. IiAS called the deal unfair to minority shareholders of Ambuja Cements. Non-promoter shareholders in Ambuja Cements raised concerns regarding the deal,[19] and following the outcry, Holcim decided to do a call with the Indian proxy advisory firms to explain the transaction. This was, arguably, the first time that an MNC directly engaged with Indian proxy advisory services.[20]
In 2014, IiAS took on India's largest passenger car manufacturer, Maruti Suzuki's (BSE: 532500 | NSE: MARUTI | ISIN: INE585B01010) decision to let its parent company, Suzuki Motor Company, Japan, set up its third plant in Gujarat through a 100% subsidiary.[21] IiAS believed this decision was not in favour of minority interest. Institutional investors wrote to Maruti raising concerns on the transaction. Following the investor outcry, Maruti made changes to the deal and announced that it would be put to vote – a decision in which the promoters would not vote.[22] The vote is slated for the later part of 2014.[23][24]
In 2014, IiAS made some bold recommendations of removing promoters from boards. IiAS recommended that Tulsi Tanti, owner and promoter of Suzlon Energy (BSE: 532667 | NSE: SUZLON | ISIN: INE040H01021), should not be reappointed to the board.[25] IiAS also recommended that Dr. Vijay Mallya not be reappointed to the board of United Spirits (BSE: 532432 | NSE: MCDOWELL-N | ISIN: INE854D01016) – a company he established and later sold to Diageo plc.[26][27]
In 2014, IiAS also questioned if India's largest real estate company, DLF (BSE: 532868 | NSE: DLF | ISIN: INE271C01023), should remain part of the CNX Nifty following a three-year ban by SEBI from accessing capital markets.[28]
