In a stunning development at HDFC's shareholders meet at Mumbai on Monday, a major foreign fund is believed to have voted against the continuation of Deepak Parekh as chairman.

Parekh got around 22 percent negative votes and 77 percent votes in his favour. Foreign institutions investors (FII) own nearly 72 percent in HDFC.

Other directors such as MD and VC Keki Mistry and director JJ Irani got more positive votes.

"We don’t know how many funds have voted against the continuity of Deepak Parekh," Mistry told CNBC-TV18. "All we know is that the e-voting takes place and based on that we get the numbers at the end of the year."

These are all proxy voters who have voted and details are not available now, Mistry added. A widely held company like HDFC is open to this kind of thing, he said.

Parekh will continue in the board of HDFC, said Mistry, adding that some of the funds, particularly pension funds, blindly followed the proxy firms advise without applying their own mind or their own rationale on whether they should vote for or vote against the resolution.

Many of our companies have surrendered our sovereignty to proxy voting agencies, said Nilesh Shah, MD, Kotak Mahindra AMC.

FII's voting is decided by global proxy voting agencies and most of them tend to blindly follow the agency resolution, Shah said.

"Someone sitting in a remote corner of the world away from Indian culture, Indian values, and Indian business ethics cannot opine, which can create such a major disruption," he said.

Parekh, one of the longest-serving chairman of HDFC, has been at the helm of it for close to three decades and took the mortgage lender to new heights.

First Published:Jul 31, 2018 1:05 PM IST