Twist in the re-appointment of Independent Director at Kirloskar Brothers Ltd
Kishor Chaukar was an independent director on the Board of Kirloskar Brothers Ltd (KBL). After his five year term got expired in April 2020, the board appointed him as an additional director till the conclusion of the Annual General Meeting (AGM) of the company. But, Kirloskar Industries Limited (KIL), a promoter of KBL, objected to this, and sent a letter to both the Registrar of Companies (ROC) and the KBL and said that calling it an ‘appointment of additional director’ rather than ‘re-appointment’ was against the provisions of the Companies Act, 2013. Mr. Chaukar clarified that KBL will follow the due process and the special resolution for his reappointment as an independent director will be passed in the subsequent Annual General Meeting (AGM).
However, in the AGM, KIL, have voted against his reappointment as an independent director. For reappointment, 75% voting in his favour by way of special resolution was needed but he only got 66% vote. The reasons given for negative voting was - mistrust of the director's independence and impartiality.
However, outside experts were not convinced about the KIL argument. They stated that though they were not aware of the internal dynamics, the fact is that actually, KIL abstained from voting on the resolutions in the recent Annual General Meeting of the company except on three items related to change in directors. Furthermore, in the last two years, it did not vote on any resolution.
