In a rare instance of shareholder activism in the banking sector, shareholders of IDFC First Bank have rejected a proposal from the bank to allow one board seat to global private equity major Warburg Pincus through its affiliate

Last month, the bank’s board had approved an investment of ₹7,500 crore from Currant Sea Investments, an affiliate company of Warburg Pincus and Platinum Invictus B 2025 RSC Limited, a wholly owned subsidiary of Abu Dhabi Investment Authority, a move aimed at shoring up the bank’s capital adequacy from 16.1 per cent to 18.9 per cent.

The bank had sought shareholder approval on the preferential allotment that would result in a post-issue shareholding of 9.5 per cent for Currant Sea Investments and 5.1 per cent for Platinum Invictus. The bank had also sought shareholder approval for the amendment of its Articles of Association to provide a right to Currant Sea Investments (or any of its assignees) to nominate one non-retiring non-executive director on the board.

However, shareholders rejected the bank’s plan, and the special resolution received only 64 per cent of the votes against 75 per cent required under Company Law for passing.

“We do not support board nomination rights without an embedded minimum shareholding threshold of at least 10 per cent. We also do not support committee nomination rights, since the determination of committee composition is the board’s prerogative and must be decided by the board independently. We do not support the resolution,” proxy advisory firm IiAS said in its postal ballot note to the shareholders, a copy of which was seen by The Telegraph.

The bank’s shareholders, however, have approved the other two resolutions through a postal ballot. One of them pertained to the allotment of compulsorily convertible cumulative preference shares of ₹7,500 crore. It was passed with 99.18 per cent of votes in favour. The second was an ordinary resolution to re-classify authorised share capital of the bank and consequent amendment in the capital clause of the memorandum of association. This saw 99.61 per cent votes polled in favour.

IndusInd Bank

Sebi is investigating six IndusInd Bank officials for insider trading to determine if they sold stock options while being aware of accounting lapses at the bank before these were publicly disclosed, Reuters reported, quoting sources.

The bank on Monday said it has signed a pact with AIC STPINEXT to provide early-stage startups and MSMEs with essential financial solutions and structural support. AIC STPINEXT is a special-purpose vehicle of Software Technology Parks of India (STPI) under the ministry of electronics and information technology.