New Delhi: Whirlpool of India Ltd on Tuesday asserted that its proposal to redesignate Anil Berera as a non-executive Independent Director is fully compliant with the applicable legal framework.
Responding to proxy advisory firms, IiAS and SES, which have raised concerns over the resolution, Whirlpool of India said in a regulatory filing that the proposed redesignation of Berera is fully compliant with all statutory and regulatory provisions of the Companies Act, 2013, as well as the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
IiAS had advised shareholders of the company to vote against the special resolution.
Berera has been associated with the board of the company since November 3, 2011.
During the period, he served as the Executive Director of the company until December 31, 2019.
Following cessation of his executive role, he was re-designated as a Non-Executive Non-Independent Director with effect from January 1, 2020 and has continued to serve in that capacity thereafter, Whirlpool of India said.
Berera held senior leadership positions within the Whirlpool group, including serving as Chief Financial Officer and Vice President (Asia) of Whirlpool Corporation, the ultimate holding company.
“Throughout his tenure on the Board, Berera has consistently demonstrated a high level of commitment and governance oversight, including attending all meetings of the Board during the relevant financial years,” the company said.
Whirlpool of India further said, “The concern in the IiAS report arises solely from IiAS’ internal governance criteria rather than any legal or regulatory restriction.”
Stating that while it respects the governance perspectives adopted by proxy advisory firms, the company said, “It is respectfully submitted that such internal governance criteria cannot override or supplant the express statutory framework prescribed under the Act and the SEBI Listing Regulations.”
Responding to the independence criteria, the company said, “Berera satisfies all the applicable conditions required for appointment as an Independent Director.”
He has no pecuniary relationship with the company, its holding, subsidiary or associate companies, or their promoters or directors, other than remuneration payable to him in his capacity as a director, during the three immediately preceding financial years or the current financial year, it asserted.
In response to SES, which raised concern over the absence of a cooling-off period prior to the proposed re-designation, Whirlpool of India said that, under applicable rules, ineligibility is triggered only where an individual has been a KMP (Key Managerial Personnel) or employee during the three financial years immediately preceding the proposed appointment.
“Berera ceased to hold any executive or employment position with effect from December 31, 2019, and since January 1, 2020, has not been a KMP or employee of the company, its group or promoter group entities,” it added.
Further, the cooling-off requirement under Section 149 (11) of the Act applies only after completion of two consecutive terms as an Independent Director. Berera has never previously served as an Independent Director of the Company, and therefore these provisions are not attracted, Whirlpool of India said.
In February this year, Whirlpool of India had sought approval of shareholders for a special resolution to redesignate Berera as an independent director through a postal ballot.
