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Investor Adviser PIRC Raises Concerns On Vedanta Corporate Governance

Tue, 2010-07-20

Dow Jones

LONDON -(Dow Jones)- Shareholders of U.K.-listed miner Vedanta Resources PLC (VED.LN) should oppose the election of three non-executive directors because of their role in the company's poor handling of environmental, social, and governance issues, investor advisory group PIRC said Tuesday.

PIRC recommended that shareholders vote against the election of senior non-executive director Naresh Chandra, chair of the India-focused miner's healthy, safety and environment committee and the remuneration committee.

PIRC said the failure of the company to recognize and address weaknesses in health and safety controls following an incident at the India-based Balco power plant this year is a "significant indicator of poor governance."

It also said the failure of the group to engage with explicit investor led concerns over the impact of group activities on the Niyamgiri region and the control issues raised by fatalities are evidence of a "lack of competent oversight."

Furthermore, PIRC raised concerns over payment of annual bonuses by the committee of which Chandra is chairman in apparent contradiction to the safety criteria upon which such awards can be made.

The company also recommended that shareholders oppose the election of non-executive director and remuneration committee member Euan MacDonald and non-executive director Arman Mehta, who chairs the audit committee and sits on the remuneration committee.

Vedanta wasn't immediately able to comment when contacted by Dow Jones Newswires.