Beleaguered Vijay Mallya is exiting the board of Sanofi India Limited (SIL). The company on Wednesday announced that Mallya, chairman of the board of directors has conveyed his decision to not seek re-election as a director at the ensuing annual general meeting (AGM).
Mallya, who has been Sanofi chairman for the last 33 years, is the first casualty of the recent decision by market regulator Sebi that wilful defaulters are barred from taking board positions in listed companies.
Mallya may have to exit from the board of Bayer Cropsciences Ltd when the new Sebi regulations are implemented in the next couple of weeks.
He is also the chairman of United Breweries which is listed on the stock exchanges.
State bank of India and Punjab National Bank have declared Kingfisher Airlines, promoted by Mallya, as a wilful defaulter of loans. Sebi had said no issuer should make a public issue of equity securities/debt securities/non-convertible redeemable preference shares, if the issuer company or its promoter or its director is in the list of wilful defaulters. Kingfisher owes over Rs 9,000 crore to banks.
Sebi board had said such persons will not be allowed to take board positions in listed companies. “If someone is proven by the Reserve Bank of India or its orders that he is a wilful defaulter, then it is very risky to allow that person to raise money from retail investors. And so, Sebi board has decided that they will not be allowed to raise capital from the market. They will also be debarred from taking positions in any listed company, for example, on the board etc,” Sebi chairman UK Sinha had said after the board meeting recently.
Mallya became a director of Sanofi India (then called Hoechst Pharmaceuticals Limited) in December 1973 and has been chairman of the board since December 1983.
In his message to the Sanofi India Limited board of directors, Mallya said, “I have been privileged to preside over the board of this company, which started as Hoechst Pharmaceuticals Ltd and to have participated in its phenomenal growth and prosperity over such an extraordinarily long period of time.”
“Today, Sanofi India Limited is not only financially strong but with an impeccable track record. It is gratifying to me that the Company continues to serve needy patients in India with world-class medication whilst ensuring consistent returns to all stakeholders.”
Shailesh Ayyangar, managing director, Sanofi India Limited said, “The board of directors while accepting Mallya’s decision, placed on record its deep appreciation of his exceptional service and leadership, firstly as a director and subsequently as chairman of the board for over four decades.”