PIRC said India-focused Vedanta made $2 million worth of political donations in the year ending March 31, 2012, as the South Asian country heads toward general elections. This compares with around $20,000 in the previous year.
“The board states that it believes that supporting the political process in India will encourage and strengthen the democratic process. However, there are concerns with the amount involved,” PIRC said in a statement. “This is at least 100 times more than what was donated in 2011…[and] use of shareholder funds as a donation for political parties is questionable use of shareholders’ money,” it added.
PIRC also recommended that shareholders oppose the re-election of executive chairman Anil Agrawal on grounds that executives shouldn’t also be chairmen. Mr. Agrawal is the company’s founder and largest shareholder. He missed two board meetings, according to PIRC.
Additionally, the advisory body recommended that shareholders oppose the election of newly appointed nonexecutive director Geoffrey Green on grounds that he is a partner at a solicitor firm that Vedanta uses. PIRC therefore questioned his independence.
Lastly, PIRC recommended that shareholders vote against the appointment of Deloitte LLP as auditor since its nonaudit fees of about $5.2 million were more than the statutory fees paid both for the year under review and on a three-year aggregate.
“This [amount] raises significant concerns about the auditor’s independence,” PIRC said.