Wipro's Rishad Premji may lose executive chairman role due to new Sebi rules

Wipro’s Rishad Premji may cease to continue as the company’s chairman in an executive role if Sebi’s guidelines on segregation of the positions of chairman and CEO/managing director in the top 500-listed companies comes into effect on April 1.Wipro had submitted a proposal to markets regulator Sebi, seeking its permission to allow Rishad to continue in an executive role following a transition that was on expected lines and was set in motion after his father and former chairman Azim Premji stepped down from his executive role last year.After the transition, the senior Premji was designated founder-chairman and was reappointed to Wipro’s board as non-executive director for a period of five years. TOI had reported previously that once Sebi’s new rules are implemented, it will be one of the rare instances where the promoter family — despite enjoying a 74% shareholding in the company — will play no role in the day-to-day affairs running of the IT blue chip. 73064559 Sources said that Sebi had communicated to Wipro that since Rishad, despite being the chairman of the board will also play an executive role in the company, the structure will not meet the regulator’s rule to segregate the roles of chairman and CEO ‘in letter and spirit’.The new rule mandates that the chairperson of the board must be a non-executive director. It was first proposed in 2017 by Sebi’s committee on corporate governance, headed by leading banker Uday Kotak. The basis of the new rule is to segregate the board of a listed company from its management. In 2018, Sebi made it a rule and gave top 500 listed companies (by market capitalisation) two years to move to the new structure, which will be effective April 1.When TOI reached out to Wipro, its spokesperson clarified that in July, founder-chairman Azim was reappointed to the board of Wipro as a non-executive director for a period of five years, but reiterated, “Wipro will abide by all applicable regulatory norms.”In its annual report for fiscal 2019, Wipro said that as and when the amended regulation relating to appointment of non-executive chairman by listed entities come into effect, “Rishad A Premji will cease to perform any executive role in the company and continue in the capacity of non-executive director of the company, such that the company remains compliant with the listing regulations in force at all times”.Although Azim has committed 67% of Wipro’s stake to his philanthropic foundation, the family continues to have the voting rights on these shares.However, Shriram Subramanian, founder & MD of proxy advisory services InGovern Research Services, spoke of another possible scenario. Since there’s growing clamour among some corporates not to separate the roles of chairman and MD, “in this background, two emerging possibilities are Rishad becoming the company’s non-executive chairman or taking the role of a joint MD after giving up his executive chairman role,” he said.The junior Premji has done multiple gigs at Wipro. From a quiet backroom operator, he rose through the ranks to become its chairman. Over the years, he headed investor relations and corporate affairs, and then as its chief strategy officer was instrumental in aligning Wipro’s strategy with the future needs of the business. Early on in his tenure, Rishad was credited with spearheading the integration of Citi Technology Services following Wipro’s acquisition of Citibank’s captive technology arm. Citi is one of Wipro’s top customers in the BFSI space. He is also credited with setting up Wipro Ventures, the company’s $100-million corporate VC arm that backs startups developing solutions that could complement Wipro’s businesses in future.

from Economic Times https://ift.tt/2rQharW