Swiggy says rejected board proposal would not have given founders extra powers

Bengaluru: Swiggy on Wednesday said the board proposal recently rejected by shareholders was aimed at ensuring founder and senior management representation, and would not have given additional powers or control to the company’s founders.In a clarification filing, the Bengaluru-based food and quick commerce company said it needs a governance structure that supports continuity in management oversight and execution of strategy.Sources told TOI that the proposal had raised governance concerns among some institutional investors over whether the changes could increase management influence over board decisions.Last week, shareholders did not approve proposed changes to Swiggy’s Articles of Association. The special resolution received 72.36% shareholder support, below the 75% threshold needed for passage.The proposal would have allowed founder and group CEO Sriharsha Majety to nominate cofounder Phani Kishan Addepalli and chief financial officer Rahul Bothra to the board.Swiggy’s current board comprises four independent directors, one executive director and two nominee directors. Had the proposal gone through, the board would have added two more management-linked directors.Addressing governance concerns, Swiggy clarified that the proposed rights did not include veto powers, affirmative voting rights, committee nomination rights, quorum rights, permanent board seats or the ability to appoint a majority of directors. The company also said all nominations would continue to remain subject to review by the nomination and remuneration committee, board approval and shareholder approval.Swiggy reiterated that the proposal was part of a longer-term effort to eventually become an Indian Owned and Controlled Company (IOCC) under foreign exchange regulations. The company clarified that the amendments alone would not have resulted in IOCC classification, which would additionally require resident Indian shareholding to exceed 50%, along with regulatory and shareholder approvals.