Rishad Premji of Wipro may lose the position of executive president due to the new rules of Sebi
BENGALURU/MUMBAI: Wipro’s Rishad Premji You can stop continuing as president of the company in an executive function if Sebi guidelines on the segregation of the positions of president and CEO/managing director in the top 500 companies listed on April 1.
Wipro had submitted a proposal to the Sebi market regulator, asking for his permission to allow Rishad to continue in an executive role after a transition that was in the expected lines and was launched after his father and former president Azim Premji resigned from his executive position in the last year.
After the transition, Senior Premji was appointed founding president and was re-elected to the Wipro board as a non-executive director for a period of five years. TOI had previously reported that once the new Sebi rules are implemented, it will be one of the rare instances in which the promoter family, despite enjoying a 74% equity interest in the company, will not play any role in the Daily management of affairs. Blue chip
The sources said that Sebi had informed Wipro that, since Rishad, despite being the chairman of the board, will also play an executive role in the company, the structure will not comply with the regulator's rule to segregate the president's roles and CEO 'in letter and spirit. '.
The new rule requires that the chairman of the board must be a non-executive director. It was first proposed in 2017 by the Sebi corporate governance committee, headed by the leading banker Uday Kotak. The basis of the new rule is to separate the directory of a publicly traded company from its administration. In 2018, Sebi established a standard and granted the 500 main listed companies (by market capitalization) two years to move on to the new structure, which will take effect on April 1.
When TOI contacted Wipro, his spokesman clarified that in July, President and founder Azim was re-elected to the board of Wipro as a non-executive director for a period of five years, but reiterated: “Wipro will comply with all applicable regulatory standards. .
In its annual report for fiscal year 2019, Wipro said that as the amended regulation comes into effect related to the appointment of a non-executive president by the listed entities, Rishad A Premji will cease to perform any executive function in the company. and will continue in the capacity of the non-executive director of the company, so that the company complies with the quoting regulations in force at all times. ”
Although Azim has committed 67% of Wipro's participation in its philanthropic foundation, the family still has the voting rights over these actions.
However, Shriram Subramanian, founder and MD of the InGovern Research Services proxy advisory services, spoke of another possible scenario. Since there is a growing clamor among some companies for not separating the roles of president and CEO, in this context, two emerging possibilities are that Rishad becomes the company's non-executive president or assumes the role of joint CEO after resigning to his role as executive president, he said.
The young Premji has performed multiple concerts in Wipro. From a silent backroom operator, he rose in rank to become its president. Over the years, he directed relations with investors and corporate affairs, and then, as its strategy director, it was critical to align Wipro's strategy with future business needs. At the beginning of his term, Rishad was credited with leading the integration of Citi Technology Services following the acquisition by Wipro of the captive technology arm of Citibank. Citi is one of Wipro's main clients in the BFSI space. He is also credited with the creation of Wipro Ventures, the company's $ 100 million venture capital corporate arm that supports startups that develop solutions that could complement Wipro's business in the future.