In a surprise announcement, Balaji Amines informed the following –
- All five independent directors of the Company – Mr. Naveena Thammishetty Chandra, Mr. Kashinath Revappa Dhole, Mr. Satyanarayana Murthy Chavali, Mr. Amarender Reddy Minupuri and Mrs. Vimala Behram Madon have resigned as Independent Directors of the Company from the closing hours on 20th May, 2023; and
- Mr. Hemanth Reddy Gaddam has resigned as Whole-time Director & CFO of the Company with effect from closing hours on 20th May, 2023 to focus on the subsidiary Company, Balaji Speciality Chemicals Limited.
The reasons attributed for the resignation of independent directors in official communication was mentioned as personal reasons and in 1 case as age related (Ms Vimala attaining the age of 75 yrs).
In case of CFO, he is moving into a subsidiary so as such will continue to form part of the group.
Such a mass resignation will surely not be liked by the market.
Interesting also check the attachment filed with the exchanges. All independent directors have used the same format of resignation letter. In a real world, how can it so be. They could have surely used a more personalised detailed letter given the sensitivity of the announcement.
In a conversation with CNBC-TV18, one of the independent directors, Satyanarayana Murthy Chavali said that all independent directors have only stepped down due to SEBI regulations, which mandate an independent director to resign if he or she has completed 10 years at that position.
Chavali said that SEBI does not allow for more than two five-year terms for independent directors and they would not be considered independent if they end up having a tenure of more than 10 years.
He further added that he would be happy to be reappointed after a three-year period and that no further resignations are expected within the company. “Fundamentally there are no issues with the business and the growth trajectory is intact,” he said.
Why could this not be highlighted by the Company at the time of the announcement?
Something seems amiss. I will stay away.