Suzlon appoints Khaitan & Co to review corporate governance practices

Suzlon Energy has appointed law firm Khaitan & Co to conduct a review of corporate governance practices at India’s largest wind turbine maker after independent director Marc Desaedeleer resigned citing lack of transparency.

Desaedeleer quit on June 8, 2024, alleging that “cooperative governance standards applied by the company did not meet his expectations including situations where communications lacked the level of openness and transparency”.

“We wish to inform you that at the request of the Chairman of the Company (Vinod Tanti), the Chairman of the Audit Committee (Gautam Doshi) has agreed to take up the responsibility of evaluating suggestions on corporate governance practices of the Company,” Suzlon says in a stock exchange filing.

“In this regard, the Chairman of the Audit Committee has decided to appoint Khaitan & Co, an eminent law firm in India, to conduct a review. To further aid the process, certain additional advisors may be appointed as required from time to time,” the filing says.

Suzlon Energy says it wishes to reiterate and clarify that it is committed to achieving the highest standards of corporate governance and the exercise is being carried out with the intention of identifying any gaps in the existing corporate governance practices of the company and ways to further strengthen them.

Desaedeleer’s term was scheduled to end in September 2024. “We discussed several of these situations, some were shared with board members, and I sent you recently a note covering these situations with the hope that this information can be used in a construction manner,” Desaedeleer said in his resignation letter.

Suzlon Energy shares closed at ₹49.61 on the National Stock Exchange (NSE) on Thursday. The stock has gained 29% in 2024 and 245% over the past year. The company’s market cap stands at around ₹67,500 crore. Suzlon shares have seen a strong rally over the last year, with stock price surging four-fold from its 52-week low of ₹13.28 on June 23, 2023, to a 52-week high of ₹52.19 on June 4, 2024.

Suzlon’s net profit declined 20% to ₹254 crore for the quarter ended March 31, 2024, as compared to ₹320 crore in the year-ago period, mainly due to certain exceptional items. Total income increased to ₹2,207.43 crore from ₹1,699.96 crore in Q4 FY23.

For the full financial year 2023-24, the consolidated net profit slipped to ₹660 crore from ₹2,887 crore a year earlier. The total income, however, rose to ₹6,567.51 crore in FY24 from ₹5,990.16 crore in the last fiscal.

As of May 24, 2024, the cumulative orders of the company stood at 3.3 GW. This includes the order book as on March 31, 2024 of 2,929 MW, plus orders secured subsequently of 402 MW.