Sterling & Wilson shareholder seeks clarity on governance issues in embassy-related litigation
New Delhi, September 4
Correspondence from a shareholder of Sterling and Wilson Renewable Energy Limited has sought clarity on certain governance aspects relating to the company's continuing litigation involving Embassy-linked entities, its indemnity arrangements and the costs associated with the disputes.
The issues were raised by SWREL shareholder Deepak Suryakant Chavan in correspondence with the company's Board concerning a December 2021 Indemnity Agreement and the ongoing legal proceedings.
The shareholder has sought information on the process through which decisions relating to the continuation, settlement and funding of litigation are made.
In its response, SWREL has maintained that there is no conflict of interest. The company has stated that the indemnity arrangement was approved by its Audit Committee as a related-party transaction and that litigation-related decisions are taken by senior management after considering legal advice.
SWREL has also stated that indemnity claims raised under the arrangement have been honoured to date, and that legal costs may be claimed under its terms, where applicable.
The shareholder, however, has sought further clarification on the relationship between the indemnity arrangement and the company's decision-making concerning litigation in different forums. The correspondence also raises questions about litigation expenditure and the safeguards in place to ensure that such decisions are taken in the interests of the company and its shareholders.
The shareholder has also sought greater transparency regarding the oversight exercised by the Board and its committees in matters involving significant litigation expenditure and related indemnity obligations. The queries broadly focus on whether adequate mechanisms are in place for periodic review of such matters.
According to the correspondence, the shareholder has requested further details on the company's approach towards evaluating the commercial implications of continuing legal proceedings, including the costs and potential outcomes associated with prolonged litigation.
SWREL has rejected suggestions that the continuation of litigation may provide any particular benefit to the indemnifying parties, describing such suggestions as speculative.
The correspondence highlights broader issues relating to corporate governance, board oversight and transparency in litigation-related expenditure, particularly from the perspective of public shareholders.
— ANI
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