IndusInd Bank shareholders block promoter’s bid for board nominees, clear Rajiv Anand as CEO

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IndusInd Bank on Friday said its shareholders rejected a proposal to induct two nominee directors to the board, with 54.04 percent voting against an amendment to the bank’s articles of association. However, investors cleared the appointment of Rajiv Anand as Managing Director and CEO, a move seen as critical in helping the private lender recover from financial stress linked to past frauds.

Promoter entity IndusInd International Holdings Ltd (IIHL), based in Mauritius, said the proposal had already received approval from both the Reserve Bank of India (RBI) and the bank’s board. “However, we understand that the said resolution in the IndusInd Bank AGM held today was not carried through, although the proposed resolution complied with the applicable laws and governance practices,” IIHL President and CEO Moses Harding said in a statement.

Harding noted that proxy advisors had raised objections, which he called a 'misinterpretation.' He added that IIHL would engage with stakeholders to address these concerns in line with the RBI’s approval.

IIHL highlighted that it has supported IndusInd Bank for over three decades without seeking board representation. It cited instances such as subscribing to 1.57 crore warrants at Rs 1,709 per share in 2021, when the market price was Rs 1,046, providing Rs 2,683 crore of capital. It also pointed to support extended during the 2008 Lehman crisis and the Covid-19 pandemic.

Under RBI’s ownership and governance rules, IIHL has brought down its stake in IndusInd Bank to about 15 percent, from over 90 percent in 1994. The promoter has now sought approval to raise its holding to 26 percent, in line with RBI’s acceptance of the Internal Working Group’s recommendations.

“Promoters have always kept the interest of shareholders as the primary objective and will continue to do so,” Harding said.