The brouhaha over the HDFC vote

If we want more nuanced shareholder voting, we need to ensure that pools of capital and their managers reside in India. This alone will ensure a win for Indian industry

Amit Tandon

Illustration by Ajaya mohanty

Last month, in related but contrasting developments, foreign institutional investors jostled to put money — lots of it — into two HDFC group companies, its asset management business and the bank, while at the same time they almost succeeded in voting out its chairman, the very person on whose shoulders these institutions have been built. The vote was explained away as being on the advice given by two global proxy advisory firms but it did amplify a risk that Uday Kotak underlined a few months ago when he rhetorically asked and answered, “Who controls the so-called diversified foreign ownership? It is two proxy advisors.”  
Proxy firms cast the vote at shareholders meeting, on behalf of the investors, that is, they hold the proxy for shareholders, hence proxy firm. The proxy voting firms are a relatively new addition in the investor support system. They are said to have their origins in the US with the passage of the Employee Re
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

Also Read

Road to succession to be a smooth affair: HDFC chairman Deepak Parekh

HDFC Group shares in focus; HDFC, HDFC Bank hit new high

Proxy advisory firms push for more changes in corporate boardrooms

HDFC Mutual Fund allots Rs 7.3 billion shares to anchor investors

Last-minute exits of Jalan, Mehta from HDFC show global proxy firms' clout

Auditors: Signing out

Don't just play the hand you've been dealt

Top board agenda this financial year

Insolvency and Bankruptcy Code left far too much room for interpretation

PNB scam and state-owned banks: The writing on the wall

Nehru responsible for partition? How to read the Dalai Lama's comments

Imperative of climate change

Populism in less developed countries is somewhat different

Hope versus hype

Needed: A little humility

First Published: Aug 13 2018 | 8:51 PM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on are available only to BS Premium subscribers. Already a BS Premium subscriber?LOGIN NOW

Register to