The Firm

Show Timings:

Friday: 10.30 pm, Saturday: 11.30 am

Sunday: 9:30am & 11.00pm

CNBC TV18
Network18

IiAS Recommends Voting Against Mallya's Reappointment

Published on Fri, Sep 19,2014 | 11:46, Updated at Fri, Sep 19 at 11:46Source : Moneycontrol.com 

United Spirits: IiAS recommends voting AGAINST Dr. Vijay Mallya's reappointment and revision in PA Murali's remuneration

United Spirits, at its AGM scheduled on September 30, 2014, proposes to reappoint Dr. Vijay Mallya and revise PA Murali’s remuneration.

Dr. Vijay Mallya has been declared a wilful defaulter by several banks in connection with their lending to Kingfisher Airlines. According to an RBI circular, banks must not extend loans to companies where a director is considered a wilful defaulter. IiAS recognizes that USL is a Diageo subsidiary, and can access funds support from its parent company. However, this is not an optimum way of doing business. Further, IiAS understands that the decision to declare Vijay Mallya  a ‘wilful defaulter’ is being contested by Kingfisher Airlines and Vijay  Mallya. But, until this matter is resolved Vijay Mallya continuing on the board will constrain USL’s ability to raise debt from the Indian financial system. Therefore, IiAS recommends voting AGAINST his reappointment.   

PA Murali has been part of the UB group for over two decades. Prior to being appointed as Executive Director in 2013, he was USL’s Joint President and Chief Financial Officer. Therefore, PA Murali is answerable for the intra-group transactions for which USL has taken write-offs and provided for in its 2013-14 financial statement. Given that context, IiAS recommends that PA Murali step down from his directorship on the board. USL proposes to revise PA Murali’s remuneration from Rs 42.0 mn per annum to Rs 128.9 mn (includes Rs 50 mn paid in FY15 as one-time bonus). For nine months effective 4 July 2013, he was paid remuneration of Rs 47.8 mn. The proposed remuneration is not commensurate with the performance of the company, and is significantly higher than industry peers. Moreover, given that IiAS believes that PA Murali should step down from the board, a discussion on his remuneration is moot.  Therefore, IiAS recommends voting AGAINST the revision in his remuneration

For more details, please click here to view IiAS Voting Recommendations on United Spirits’ 2014 AGM resolutions.

Disclaimer: The information/opinions expressed in this report/newsletter are those of the author. This website has not verified the accuracy of the claims made in the report/newsletter, nor does it agree or disagree with, or endorse any information/opinions contained therein

 
Twitter


 
Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.