Ujjivan Financial Services
will reach out to the shareholders who voted against a special resolution to appoint Chairman Samit Ghosh as the managing director (MD) and chief executive (CEO) of the holding firm.
Ujjivan Financial Services
holds Ujjivan Small Finance Bank, which is run by Nitin Chugh after Ghosh left the position in November 2019. Ghosh subsequently became the chairman of the holding company.
As Ittira Davis, MD and CEO of the holding company, moved as a director of the bank, a special resolution was brought to the shareholders to make Ghosh the temporary MD and CEO. This was part of four resolutions — two special and two ordinary — to appoint directors on April 27. While the ordinary resolutions were passed, the special resolutions failed to garner the requisite nod.
“The voting pattern suggests that the votes were cast the same way for all four resolutions. Ordinary resolutions need 50 per cent approval, so they passed, but the special resolution needed 75 per cent, and they were defeated,” said Amit Tandon, founder and MD of Institutional Investor Advisory Services, or IiAS.
The two special resolutions, to appoint Ghosh as the MD and CEO for three years and to approve the re-appointment of Abhijit Sen as an independent director for five years, garnered 70 per cent of the votes. So did the ordinary resolutions.
If all four were special resolutions, then something akin to the Lakshmi Vilas Bank
would have happened where the shareholders voted to topple the management. “We understand that a few HNIs, who were early investors in our IPO, managed by a broker to vote against the resolution,” said Ghosh, who has 3 per cent share in the company. The company is mostly held by private equity and by shareholders coming during the IPO, including HNI shareholders.
According to Ghosh, it was a temporary move, and he had no intention of staying in that position for long. The plan, according to Ghosh, was to step in till a permanent MD and CEO candidate is found. The three-year mentioned in the resolution was a standard clause, but it was expected that a CEO could have been found within a year.
The shareholders who voted against the resolutions did not have an alternative candidate. “Perhaps they were not happy with the share performance,” Ghosh said. According to Tandon, the company can move the same resolution again if they wish.
“The company can always go back to their investors, understand their issues, and re-introduce the resolutions if they want.”
Ujjivan closed at Rs 202.8 a share, down 2.19 per cent, on the BSE on Friday. The shares had listed at Rs 231.90 apiece in May 2016.