Diversified firm ITC has filed a Rs 1,000-crore defamation suit against proxy advisory firm IiAS at the Calcutta High Court for allegedly making 'defamatory' statements against the company and its directors.
In the suit, filed last month, ITC said Institutional Investor Advisory Services (IiAS) had published two reports that were "false, defamatory and malicious" on its website www.iiasadvisory.com in July 2017 before the AGM of the company.
I prayed before the court to issue a "decree for Rs 1,000 crore against" the defendants while also seeking a mandatory injunction directing IiAS to publish an unconditional apology.
The complaint was presented before the court of Justice Soumen Sen on August 29 and leave was granted. Subject to scrutiny, the summons will be served on all parties.
IiAS had published two voting advisories for shareholders of ITC and had suggested them to vote against the company's plan to pay a monthly remuneration of Rs 1 crore to its Chairperson Y C Deveshwar for his non-executive role.
IiAS had said it "believes the board structure, and the proposed remuneration, signal Yogi Deveshwar's continuing control over the company, which undermines the recently appointed CEO Sanjiv Puri. Once Yogi Deveshwar has stepped down, he must let go".
ITC, in its petition filed through its counsel Khaitan & Co, said IiAS' reports 'Voting Advisory, ITC Limited, Annual General Meeting' and 'ITC's Succession Plan: Letting it Go', contained "words which were defamatory of the plaintiff (ITC) and its management".
It further submitted that news based on IiAS advisories were widely read and circulated across the country and had a "huge negative impact on the image of ITC".
Claiming damages, ITC said the composition of its board, the audit committee, and the nomination and remuneration committee "was in compliance with all applicable laws".
"The imputation that Deveshwar's remuneration was not deserved and fixed on improper considerations is also without basis and patently false. Such appointment and remuneration is in keeping with current practices in the industry and the role envisaged for Deveshwar," said ITC.
Shareholders of ITC at the AGM held on July 28 approved the remuneration of Deveshwar as Chairman and Non-Executive Director with effect from February 5, 2017, with 85.11 per cent of polled votes in favour and 14.88 per cent against.