Minority shareholders reject re-appointment of Neeraj Kanwar as Apollo Tyres MD

The minority shareholders of India's second largest tyre manufacturer, Apollo Tyres, have rejected the re-appointment of Neeraj Kanwar as Managing Director of the company. Kanwar is also the vice-chairman of Apollo Tyres.

The resolution for re-appointment of Kanwar as Managing Director was not passed as the votes cast in favour were 72.72%, less than three times the number of votes cast against (27.28%) the resolution.

According to reports, some Indian institutional investors including mutual funds are believed to have voted against Kanwar on the issue of high compensation. Kanwar, who took home an annual salary of Rs 30 crore in 2016, saw his compensation rise 43 per cent to Rs 42.8 crore in 2017.

"Apollo Tyres' board of directors will discuss the resolution in the next meeting and determine the course of action to be taken with respect to it. The company would like to reiterate that it is the vision and resolve of the company, and its senior leadership, to deliver value to all its stakeholders including employees, shareholders, customers, partners and other relevant communities," the company said in a statement.

Amit Tandon, MD at Institutional Investor Advisory Services (IiAS), a proxy advisory firm tols CNBC TV 18, "This is the first instance when shareholders have questioned the right of the promoter to run their own company, which does not usually happen unless there is a family dispute or something similar."

Institutional investors own 44 percent of equity in the company and roughly about 56 percent of these voted against, he added.

"The institutional investors have been unhappy with the compensation and could be the principle reason for their voting against the re-appointment. Last year also 57 percent of institutional investors had voted against Neeraj Kanwar's compensation. Moreover, the performance of the company has also not been impressive, which was also concerning to investors," he added.