Swiggy Downplays Failed Shareholder Vote, Attributes to Governance Concerns

Swiggy Clarifies Motive Behind Indian Ownership Proposal

Swiggy, the online food and grocery delivery major, has clarified its motive behind a recent proposal to become an Indian Owned and Controlled Company (IOCC), which was struck down by shareholders. According to a stock exchange filing on May 27, the company's aim was to strengthen governance, rather than grant more control to its founder or promoter group.

The filing stated that the proposed amendments did not create any veto rights, affirmative voting rights, committee nomination rights, quorum rights, permanent Board seats, or any right to appoint a majority of the Board. This move was intended to promote transparency and accountability within the company.

On May 22, Moneycontrol reported that Swiggy's move to become an IOCC was outvoted by shareholders, with a 72.35 percent approval rate falling short of the required threshold by 2.65 percent. Sources had earlier suggested that the vote fell through due to a lack of proactive engagement by management with mutual funds and other public market investors, ineffective floor management, and a lack of strategic communication on the benefits of IOCC for the company's financial performance.

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Swiggy's subpar financial performance, which has driven down share prices, was another reason foreign investors were unwilling to sell shares at current levels. Group CEO and co-founder Sriharsha Majety also proposed inducting two additional directors on the board: chief financial officer (CFO) Rahul Bothra and co-founder Phani Kishan. However, these proposals were also struck down.

In the stock exchange filing, Swiggy clarified that the proposed changes reflected a transparent and accountable mechanism for achieving strategic objectives, rather than a concentration of power. The company stated that it will continue to engage constructively with its shareholders and other stakeholders and will evaluate any future structural or strategic steps through lawful, transparent, and shareholder-aligned processes.

Note: The approval rate for the additional directors is not specified in the original text.

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