Mohandas Pai returns to shareholder activism

MUMBAI: Former Infosys director T V Mohandas Pai has returned to what he does best-promoting shareholder activism. Pai, now chairman of Manipal Universal Learning, has acquired a significant minority stake in InGovern Research Services, a proxy advisory services company, which helps institutional investors tackle corporate governance issues at listed companies.

It was Pai's hard-hitting questions at Infosys shareholder meetings that drew the attention of the company's co-founders N R Narayana Murthy and Nandan Nilekani, who later invited him to join the management. Pai rose through the ranks becoming HR director before quitting the IT bellweather last year. His investment in InGovern brings out the potential of shareholder activism which is just about taking baby steps in India. A case of shareholder activism is currently being played out at AkzoNobel, where a group of minority shareholders, including Asian Paints, LIC and SBI Mutual Fund, have objected to the Dutch paint maker's proposal of merging three unlisted companies with the listed entity citing higher valuation.

While confirming the stake-purchase in InGovern, Pai said, "I want to associate with a concept like the one pioneered by InGovern where minority investors are treated fairly to strengthen corporate governance practices. This is something I am passionate about and picking up a stake in the company shows my commitment to it." At Infosys, Pai was the brain behind the company's much talked about annual reports, which set new benchmarks in corporate governance and shareholder engagement. He declined to detail his financial investment but will be on InGovern's advisory committee. The Bangalore-based InGovern is promoted by Shriram Subramanian, who earlier headed Infosys' wealth and asset management consulting unit.

Unlike in the western world, where there is strong shareholder activism, in India proxy advisory firms like InGovern and Institutional Investors Advisory Services (IIAS), floated by Anil Singhvi and Amit Tandon, are aiding the development and improvement of corporate governance practices.

A few months ago, IIAS attracted investments from Tata Investment Corporation, HDFC and BSE, which together bought a 74% stake in the firm.