Sept. 28--Indiabulls group, which has presence in financial services, power, real estate and other businesses, is going ahead with its decision to restrict the annual general meetings (AGMs) of its listed companies to 15 minutes each, citing shareholder convenience even as experts slammed the move.
As per this plan, all the six AGMs of the group's companies on 30 September should be over in 90 minutes, without a single break between any two meetings.
The group's six listed companies are -- Indiabulls Infrastructure and Power Ltd, Indiabulls Power Ltd, Indiabulls Securities Ltd, Indiabulls Real Estate, Indiabulls Wholesale Services Ltd and Indiabulls Financial Services Ltd.
On Friday, the company defended its move, saying AGMs typically get over in about 15 minutes and that the stakeholders had demanded that the meetings be scheduled without any break so they could participate in all the six.
The group was responding to a clarification sought by BSE Ltd on how it proposed to ensure that the proceedings of the AGMs, including addressing of queries raised by shareholders, would be completed within 15 minutes for each company.
Indiabulls informed BSE that the creation of most of the listed companies in the Indiabulls group is an outcome of several demergers and a majority (almost 80%) of the shareholders are common between various group companies.
"In fact, last year a majority of the shareholders present in the AGMs of these companies demanded (some of these shareholders had subsequently sent written requests as well) that the meetings should be scheduled without any break so that they can participate in all the meetings," the group said.
Indiabulls said some of these companies are small with a market capitalization of around Rs75 crore.
"Market capitalization cannot be a determinant of time taken," said Amit Tandon, founder and managing director of proxy advisory firm Institutional Investor Advisory Services.
Reliance Group, promoted by Anil Ambani, holds the AGMs of Reliance Capital Ltd, Reliance Communications Ltd and Reliance Infrastructure Ltd on a single day to save cost and time. But some of these AGMs last almost two hours.
Many experts said the 15-minute cap is unacceptable as updating about a company's development itself would require more than 20 minutes.
Amit Anwani, research analyst at Kantilal Chhaganlal Securities Pvt. Ltd, said AGMs provide small investors an opportunity to ask questions of the managements and should be of at least one hour per company. "If the rationale for demerging the entities was that each business needs focus and has different drivers, then clearly, more time is needed for each AGM," said Tandon.
Shriram Subramanian, founder, InGovern Research Services, another proxy advisory firm, too, said 15 minutes wouldn't be enough for the normal conduct of business. "Companies should take AGMs seriously and not treat them as a charade. Investors should use AGMs to meaningfully engage with companies," he said.
The shares of most of the Indiabulls group companies fell on Friday, when the Sensex lost 0.84% to end at 19,727.27 points.