Parekh defends HDFC directors’ role in group cos
HDFC is the parent company and has investments in its subsidiary and associate companies.
MUMBAI: HDFC chairman Deepak Parekh has defended the company's executive directors in their role as directors of HDFC group companies saying that these directorships are to protect the interest of the company's shareholders.
“HDFC is the parent company and has investments in its subsidiary and associate companies. Taking care of our strategic investments is a core function at HDFC. So to reiterate, directorships of HDFC’s executive directors in HDFC group companies is an extension of their responsibilities at HDFC. It would be erroneous to construe these directors as being over boarded,” Parekh said in his annual letter to shareholders.
Parekh's comments come after questions were raised last year on the company’s executive directors having directorships in various boards which does not give the time to concentrate on their main responsibilities.
Parekh said the board does review the outside involvement of its executive directors to ensure that the balance between broadening their perspective and managing the demands on their time is optimal.
Parekh also said that diversified funding, conservative risk appetite and years of experience has helped HDFC come through a challenging period in the last fiscal year.
He was referring to the liquidity challenges faced by NBFCs and housing finance companies in the second half of the last fiscal.
“We held our ground by consciously staying away from funding what we perceived were riskier assets. Unsurprisingly, in the second half of the year, we were asked what we did differently that enabled us to stay resilient and be the preferred choice in the flight to safety. Perhaps a combination of experience and adhering to our risk appetite held us in good stead,” Parekh told the company’s shareholders in his annual letter.
“HDFC is the parent company and has investments in its subsidiary and associate companies. Taking care of our strategic investments is a core function at HDFC. So to reiterate, directorships of HDFC’s executive directors in HDFC group companies is an extension of their responsibilities at HDFC. It would be erroneous to construe these directors as being over boarded,” Parekh said in his annual letter to shareholders.
Parekh's comments come after questions were raised last year on the company’s executive directors having directorships in various boards which does not give the time to concentrate on their main responsibilities.
Parekh said the board does review the outside involvement of its executive directors to ensure that the balance between broadening their perspective and managing the demands on their time is optimal.
Parekh also said that diversified funding, conservative risk appetite and years of experience has helped HDFC come through a challenging period in the last fiscal year.
He was referring to the liquidity challenges faced by NBFCs and housing finance companies in the second half of the last fiscal.
“We held our ground by consciously staying away from funding what we perceived were riskier assets. Unsurprisingly, in the second half of the year, we were asked what we did differently that enabled us to stay resilient and be the preferred choice in the flight to safety. Perhaps a combination of experience and adhering to our risk appetite held us in good stead,” Parekh told the company’s shareholders in his annual letter.