Divya Agarwal
A shareholder of Sterling and Wilson Renewable Energy Limited (SWREL) has sought clarification from the company’s Board on its handling of ongoing legal disputes involving Embassy-linked entities, including litigation decision-making, expenditure and the indemnity arrangement.
The queries were raised by shareholder Deepak Suryakant Chavan in correspondence with the company concerning a December 2021 Indemnity Agreement and the continuing legal proceedings. The shareholder has sought greater clarity on how decisions regarding the continuation, settlement and funding of litigation are taken, particularly where such matters involve significant expenditure and indemnity obligations.
In its response, SWREL stated that there is no conflict of interest in the arrangement. The company said the indemnity agreement was approved by its Audit Committee as a related-party transaction. It also stated that litigation-related decisions are taken by senior management after considering legal advice.
SWREL further said that indemnity claims raised under the arrangement have been honoured to date. According to the company, legal costs may also be claimed under the terms of the agreement, where applicable. The response forms part of the company’s position on the governance concerns raised through the shareholder correspondence.
The shareholder, however, has sought further clarification on the relationship between the indemnity arrangement and the company’s decision-making regarding litigation across different forums. The correspondence also raises questions around litigation expenditure and the safeguards governing such decisions, including the extent of Board and committee oversight.
The shareholder has additionally sought greater transparency on whether matters involving substantial litigation costs and related indemnity obligations are subject to periodic review. The queries seek to understand how the company assesses the commercial implications of continuing legal proceedings, including the costs involved and the potential outcomes of prolonged litigation.
SWREL has rejected suggestions that the continuation of the litigation could provide any particular benefit to the indemnifying parties, describing such suggestions as speculative.
The matter therefore centres on corporate governance, Board oversight and transparency in litigation-related expenditure, with the shareholder seeking further clarity on the mechanisms through which these matters are reviewed and decisions are taken in the interests of the company and its shareholders.
