IndusInd Bank gets promoter IIHL backing as shareholders weigh in on nominee director proposal

New Delhi, Aug 29 (PTI) IndusInd Bank on Friday said its proposal to induct two nominee directors on the private sector lender's board could not get shareholders' approval at the bank's annual general meeting.

The majority shareholders, 54.04 per cent, voted against the amendment in the articles of association of the bank, as per the regulatory filing by IndusInd Bank.

However, the shareholders approved the appointment of new Managing Director and CEO Rajiv Anand as part of its efforts to come out of the financial mess caused by past frauds.

The Mauritius-based promoter company IndusInd International Holdings Ltd (IIHL) in a statement said the resolution, which also required amendment of the bank's articles of association, had received prior approval from the Reserve Bank of India (RBI) and the board of the bank "However, we understand that the said resolution in the IndusInd Bank AGM held today was not carried through, although the proposed resolution was in compliance with the applicable laws and governance practices," IIHL President and CEO Moses Harding said in a statement.

He said proxy advisors had raised certain observations against the resolution.

"We believe that there is a misinterpretation, and we will be happy to address the concerns in line with the RBI approval received. Our endeavour will be to dispel the notion raised by the proxy advisors on the matter," he said.

Harding underlined that IIHL has been a promoter of IndusInd Bank for over 30 years, consistently supporting the lender through multiple business and regulatory cycles without seeking board representation or specific nominations so far.

The promoter entity cited several instances of support, including subscribing to 1.57 crore warrants of the bank in February 2021 at Rs 1,709 per share - when the market price was Rs 1,046 - amounting to Rs 2,683 crore; extending support during the 2008 Lehman crisis; and participating in capital-building measures during the Covid pandemic.

As per RBI's Ownership and Governance guidelines of 2008 and revised directions of 2023, IIHL has reduced its stake in IndusInd Bank to around 15 per cent from over 90 per cent in 1994.

The company has sought RBI approval to raise its stake to 26 per cent, in line with the central bank's acceptance of the Internal Working Group's recommendations.

"Promoters have always kept the interest of the shareholders as the primary objective and will continue to do so in all future times," Harding said. PTI DP RHL