A Mumbai-based pressure group says that the Taj Group of Hotels has violated the law by having only 11 instead of 14 independent directors, most of whom are on the boards of too many companies and are unable to attend shareholder meetings.
Stakeholders Empowerment Services (SES) said in a report that Indian Hotels Company Ltd (IHCL), which owns over 100 hotels including the Taj, does not have a single woman director on its board. The report came as the hospitality major prepares for its Annual General Meeting this Friday.
Reacting to the report, a spokesperson for the hotel group refused to comment on the gender issue but said it is the process of appointing additional directors to meet the legal requirement.
SES does not have legal powers to enforce compliance – market regulator SEBI does –but reports of such groups are usually taken seriously. SEBI did not immediately react to the report.
In its 22-page report, SES said that if the chairman is a non-executive director, the companies should have at least 50 per cent independent directors on their boards. Its analysis showed that IHCL has 11 directors this year as against 14 last year.
It said that the company had not complied with the law within the stipulated six months –the time Cyrus Mistry took over as Chairman of Tata Sons, which owns the hotel group.
SES works for the rights of minority shareholders.
At the upcoming AGM, it has advised the shareholders not to reappoint HDFC chairman Deepak Parekh as director as he has been on the board for the past 13 years and is also on the board of nine other companies. He has also not attended a single AGM of the hospitality group in the past three years.
It also asked shareholders to vote against Shapoor Mistry’s appointment as Director because he has attended only 8 out of 14 board meetings in the past three years and is a director in 11 other companies.
Last year, SES questioned Shapoor Mistry’s appointment as an independent director of IHCL as he was the elder brother of Cyrus Mistry, then Deputy Chairman of Tata Sons. Since then the company has appointed the former as Director.