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Thursday, December 15, 2011

Mr Sunil Behari Mathur earned Rs 1.27 million for attending 1 meetingof HDIL

While reading the latest annual report of HDIL(http://www.hdil.in/pdf/annual_report_2010-11.pdf), it struck me that Mr SB Mathur(ex Chairman of LIC), now on 12+ boards, had attended only 1 out of 5 meetings held in FY2010-11. While he got sitting fees @ Rs 20,000 just for one meeting, he earned the same commission(Rs 12.5 lakhs) as the other directors did.  And to top it all, he had not attended the previous AGM. He is thus a poster child for a serial independent director, less interested in the company than in fees.

Now, one can argue that AGMs are anyway a waste of time as are board meetings where management decisions are just rubber stamped. If that is the case, he is an extremely expensive rubber stamp earning Rs 1.27 million for attending just 1 meeting. And lest you think this is an exception, he had attended just 3 of 5 meetings in FY2009-10, acceptable but not stellar by any stretch of imagination. Given that he's on the board of a realty company considered to be in a murky sector, one would have thought he will pay extra care to that company as opposed to other financial services companies etc. But no, he got away with attending just 1 meeting, and was reappointed as well. So what can investors do about it?
  1. Shame:-For starters, bring a resolution seeking that for the above reasons, the director should not be reappointed. I agree that illness etc may have prevailed, but that attendance record should have certainly been explained to the shareholders, which was not done. 
  2. Voting:-Casting a negative vote, especially by institutions would have sent a strong message. 
  3. Keep track:-Read the annual report and keep and eye for such things.
Now, I have nothing against Mr Mathur and admire the work he has done while in LIC. But such conduct as an independent director of a listed company, does not befit his reputation. If I'd invested earlier in HDIL, I would have brought a shareholders resolution before the AGM itself. But I guess that would need to wait till next year now. If any reader thinks I'm being too harsh, then feel free to comment civilly below,.

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