The family behind Essar Energy, a London-listed subsidiary of India’s Essar Group, appears to have won its battle against a British lobby group that had criticised its corporate governance practices.
At the family-controlled business’s annual general meeting on 4 September, family member Prashant Ruia was re-elected as a director of the company, with 99.73% votes in his favour.
His victory comes just days after Pensions & Investment Research Consultants, a group that lobbies for transparent corporate governance in the UK, asked investors to vote against his re-election.
PIRC claimed Prashant, who chairs Essar Energy and controls more than 75% of the company along with his family, wasn’t sufficiently independent to be an effective chairman.
However, a spokesman for the family business, which listed in London in 2010, had previously told CampdenFBthat shareholders were happy with governance at the company. “We have been very clear to all investors since prior to our IPO that we do not have an independent chairman,” he said.
Revenues at the energy company increased by 60% to $16 billion (€12.7 billion) in 2011, up from $10 billion the previous year.
Investors also voted in favour of the re-election of Prashant’s uncle, Ravi, as director. Ravi, who was forced to step down as the chair of Essar Energy last year due to his alleged involvement in India’s telecoms scandal, secured 99.65% of the votes.
The Ruias are worth around $10 billion, according to Forbes, making them the fourth richest family in India. Their fortune is largely thanks to their family’s conglomerate, whose operations span steel, oil and gas, shipping and real estate.