Thursday, July 30, 2015

IDFC's disorderly AGM

IDFC conducted its 18th AGM at Kasturi Srinivasan Hall of The Music Academy on 30th July. The Hall was too small to accommodate the shareholders and company officials. The Chairman had the black humour to say that when he entered the Hall, he thought that the place was eminently suited for 'compact' conversation with shareholders.

Many shareholders complained about the smallness of the venue and the unprofessional way in which registration of attendees was handled. It was extremely noisy because of disgruntlement of shareholders outside the hall and whenever the only door to the hall was opened, the meeting was obviously disturbed. But the Chairman Rajiv B.Lall was unperturbed. He was perhaps glad that shareholders would air their grievances about arrangements for the AGM and therefore there would be little discussion on the company's performance. His tactics succeeded. Despite the continuing melee outside the hall which was audible inside, the Chairman did not try to do anything about it even once. If this is the style he follows in the company, the company is doomed.

Several shareholders complained that they did not receive the annual report. This happened last year also. Grievances regarding the company's website were also expressed by many. It is strange that the company's annual report for 2014-15 was not uploaded in the website till the previous day. If SEBI has no guideline on this, it is time SEBI looked at this issue seriously.

Many were pleasantly surprised that IDFC's gross NPA as on 31st March was only 0.7% (Serious deterioration is seen as on 30th June, 2015.)

The Chairman cleverly spent a lot of time speaking on the proposed IDFC Bank. He expected the shareholders to clap / rejoice when he repeatedly mentioned that every single share in IDFC is entitled to automatic allotment of one share in the bank. The shareholders know the difficulties encountered by new banks and therefore there was hardly any enthusiasm among them. Lall then cracked the age-old joke of an economist making a prediction without mentioning when the prediction would come true. (He was trying to say that the bank would do well in the long-run, when we are all dead?) Because of the cheerless atmospherics in the hall, this joke also fell flat.

It must be admitted that Lall was tenacious till the very end and he never gave up the pretence that he was very mindful of shareholders' views. The disarming smile on his face never disappeared. He adopted the same style in the last AGM also. He was the only one who spoke on behalf of the company. Even the Secretary had no role. He could do this because whenever anyone complained about the company, without trying to verify the facts from from his executives, he profusely apologised. Is he so confident about the company's weaknesses? For example, quite a few equity holders complained about the company's telephonic (non-) response. Lall did not care to have this problem verified. After a long time, another shareholder (?) came to the company's rescue and said he did not face any problem. It is noteworthy that Rajiv B.Lall is the 'executive' chairman. In the meeting, one got the distinct impression that perhaps he is too pleasant-mannered and tolerant to be an effective leader.

1 comment:

Anonymous said...

Some shareholders waste a lot of time raising pedestrian issues.