Theatre of Capitalism - The Annual General Meeting

AN ANNUAL SHAREHOLDERS MEETING MAY NOT SOUND LIKE A PLACE FOR A BOLLYWOOD DENOUEMENT, BUT THESE CORPORATE GATHERINGS ARE AS RIFE WITH TRAGEDY AS THEY ARE WITH FARCE.

Sidin Vadakut in Motherland

Indian films strive for closure. In fact the single most important driving force that powers the narrative in most Indian films is the satisfactory closure of gaping wounds, wounded pride, injustice or vendetta.

Our films may navigate increasingly complex and original ways of achieving this closure. But in the end most of them achieve this through some age-old final-reel tropes. The climactic clash between the forces of good – the outnumbered hero – and the forces of evil – the bad guy and his hordes – is a popular one. The union of cleaved lovers, often involving trains, is canon. Family movies usually feature a reunified, joyous household pardoning the most heinous relatives who, moments earlier, were plotting their wholesale slaughter.

Mani Ratnam’s 2007 feature film Guru, however, ends with the most unique setting for a closing scene of any Indian film: an Annual General Meeting of shareholders.

This might seem like a bizarre choice of scenario. AGMs are a statutory requirement for companies listed on stock exchanges. In most countries in the world listed companies are required to hold at least one meeting a year where shareholders get a chance to vote on important company measures and approve annual statements of accounts.

These meetings can often be very important, highly charged and widely reported in the media. But how can they ever be interesting enough to serve as the closing act of a Bollywood blockbuster?

AGMs can be fun. But not Amitabh Bachchan or Anil Kapoor fun. Surely?

In fact it is a mystery that more blockbuster films don’t use AGMs in their plot. For when it comes to sheer theatricality some Indian AGMs can be every bit a work of performance art as Shahrukh Khan’s latest.



In the summer of 2006 I joined one of India’s grand old manufacturing companies as a consultant. Established well before India became an independent country, the company continues to be one of the best-known names in consumer electricals. Though these days it makes most of its money from industrial products like transformers. It has its headquarters in a shiny skyscraper in one of Mumbai’s most expensive neighbourhoods.

But inside it remains a quaintly old-fashioned company.

At the time I was struggling to make ends meet as a novelist – essentially an income-free profession – and hastily agreed to work for them part-time as part of a new business development team. The team consisted of two people. A vice president who thought big. And the consultant who translated these ideas into spreadsheets. It was a poorly thought-out project from the outset and no one was particularly surprised when it was shut down ten months later.

But in the interim I got paid handsomely, and used the money to get married.

One morning in July 2006, just a few months after we started work on our ill-fated project, I noticed an army of unfamiliar faces trooping in and out of our offices in the head office tower.

This was most rare. The offices mostly housed departments that had nearly nothing to do with the outside world: accounts, legal, corporate HR, statutory and reporting, insider trading, etc. Nobody visited us, not even employees from other departments.

Yet suddenly here was an eccentric group of old men and middle-aged women all lining up to meet the company secretary. Some of them needed help getting in and out of the lifts.

But this was not a company where you went around asking questions. Everything and everybody functioned on a need to know basis. If you needed to know you would know.

The next morning everyone received a directive from human resources. All employees were expected to attend the company’s AGM taking place that morning in the auditorium of a nearby school. Attendance was compulsory. Shuttle buses would be provided.

Outside the venue there was a confusing crowd of people. Schoolchildren bobbed in and out of the crowd trying to grab freebies like baseball caps, and snacks. Irritated employees coagulated into groups and promptly began to bitch about the waste of time. A few business journalists waited for the meeting to start.

But the most voluble group was the same army that had invaded our office the day before. They thronged around a side door, presumably the stage entrance, and made a terrible racket. Some were clearly having arguments.

This was the first time I’d ever been to an AGM. I wasn’t prepared at all for the chaos taking place around me. It seemed ridiculous even by the company’s ancient, peon-employing, stationary-rationing, pay-grade-based-Diwali-gift-giving ways.

Shortly before the designated start-time a series of expensive cars rolled up to the stage entrance. And the top management climbed out. “Dad’s Army” pounced. There was a huge racket as they thronged around the approaching board of directors trying to shake hands and have a quick word. It was not all that different from the way professional wrestlers walk toward the ring through a forest of outstretched hands, distributing high-fives.

What was more remarkable was that the President and the CEO seemed to know several of these rabble-rousers by name.

“Hello, Mr Tripathi? Long time!”

“Mrs Maheshwari, how have you been?”

“We meet again Koshi saab!”

I followed the rest of the employees into the auditorium, still puzzled by all this.

Inside the auditorium two very old men, both well above 60, were tearing into each other. They briefly went silent as the board of directors took the stage, and then resumed immediately.

They argued like schoolchildren. Vigorously, but insubstantially.

“You keep quiet sir! What do you know?”

“I know more than you. You please don’t irritate me today.”

“This is a free country! I will irritate you again and again. What will you do?!”

The men sat right in the middle of the front row. The army all walked in and occupied the seats around them. Not one person tried to stop their bickering. On the stage the board of directors waited for the men to calm down. They didn’t.

Finally the president of the board of directors, let us call him Mr Kumar, walked up to the very edge of the stage, and tried to mediate for peace.

“Mr Joshi I am personally asking you to please calm down.”

“Kumar saab, this man has been continuously irritating me since I came for this meeting…”

The really funny thing was that I was the only person in the entire hall cringing. Nobody else seemed to even care. The employees were fidgety and kept looking at their watches. Most of the journalists fiddled with their mobile phones.

“Who are these irritating people?” I whispered to a colleague. He chuckled into his palm and replied: “Shareholders.”

After a few minutes the old men declared a truce. Everyone settled down. The company secretary walked up to the microphone.

And then the meeting proceeded to descend into complete farce.



Deepak Shenoy, a well-known markets analyst and columnist, says that the father of the old-fashioned annual general meeting in India was Dhirubhai Ambani. Ambani was the first person to convert what was just a statutory requirement for listed companies, into an annual carnival for shareholders.

In the late 1970s and early 1980s Ambani elevated Reliance Industries’ AGMs into works of art. A unique form of capitalist theatre in a country that resisted all forms of free market exuberance.

First of all the events were often held in stadiums. Over 50 000 investors bought Reliance’s shares during its initial public offering, India’s first popular listing. Many of them turned up for AGMs. Shenoy says that meetings were held like family functions, inaugurated with ceremonial lamps being lit and prayer sessions. Proxy forms, that allowed shareholders to appoint substitutes to represent them, were in high demand and often sold for large sums of money.

This was not just because they got a chance to see Ambani, perhaps the most famous businessman in India at the time. The forms also had monetary value. Attendees got free gifts including discount coupons from Vimal, Reliance’s textiles retailing arm. All a member of the public had to show to attend these events was a proxy form or proof of ownership of a single share. “A shareholder’s proxy form to attend a Reliance AGM had a sizeable cash value,” says Shenoy, “and for many years there was a booming market for them.”

“Ambani basically created what is known as the equity cult in India,” says Govindraj Ethiraj, veteran business journalist and broadcaster. Before Ambani took Reliance public, Ethiraj explains, the idea of owning equity in
 a company was not very popular. The
 number of retail shareholders were
rare and mostly limited to the small, 
informed groups in the larger cities.

“Ambani changed all that,” recalls Ethiraj. Ambani gave the impression that he was sharing his immense wealth with the public. Thousands upon thousands of people, many of them Gujaratis, bought Reliance stock. And then they began to invest in other companies as well.

By the early 1990s, Ethiraj estimates, this equity cult had exploded to some 20 million people. Ambani was the catalyst for that explosion.

Ambani was a shrewd businessman. He was also a showman. Years before Steve Jobs perfected the art of the keynote, Ambani used his AGMs to enthral the shareholders and the press. But it was not that Ambani was a natural communicator. Ethiraj, in fact, remembers him being less than eloquent. He wasn’t particularly fluent in English. And often spoke in a mishmash of English and Hindi with smatterings of Gujarati. But he knew how to connect with his audience. Perhaps, Ethiraj says, because his delivery seemed so home grown.

There are very few online videos of Dhirubhai Ambani speaking. The rare clip of his talking to investors bristles with energy. As he speaks, Ambani thrusts his hands into the air in front of him. Suddenly he whips his spectacles off. And when he breaks into laughter he does so sincerely, deeply, with a full mouth of teeth.

Ambani made it a point to announce one new initiative at every AGM, a move, says Shenoy, that electrified shareholders in the audience. It is a strategy that Dhirubhai Ambani’s son Mukesh Ambani continues to use to this day. Though Mukesh has inherited little of his father’s aura.

Ambani senior’s theatricality slowly began to spread to other firms. While few others could fill stadiums, they did incentivise shareholders with freebies and coupons. Many meetings began to deal less and less with business and more and more with drama and reward.

It may seem like a waste of time for both parties. But Shenoy says there is a certain logic here. Many of these people who attend AGMs have owned shares for many years. But they seldom own enough to make any serious money. And because they are so small they have no say in the way the company operates. The AGM, he says, is their one chance in the whole year to mooch something off the company.

Back in the school auditorium nobody paid much attention as an assortment of executives read out passages from the annual report. A few business journalists took down notes.

And then at some point the company secretary invited questions from the audience.

There was a mad scramble to raise hands and reach for the mics that were circulating in the first few rows. These were the “mooch seats”. The army of shareholders, most of them pensioners and old housewives who came for the freebies – caps, stationary, discount vouchers – and their moments of glory.

The first question was not a question at all. But verse. A woman read out Urdu couplets that compared the President’s handsome face to the sun, the moon and the stars. There was a smattering of applause. And then another man got up: “Sir, I would also like to share some poetry…” His words were drowned in some hearty geriatric booing.

He got very upset: “Sir! Look sir. They do this every time. When Ms Maheshwari wants to recite poetry nobody complains. But when I want to recite…”

“Boo!”

Once again the President intervened. “How can I not listen to your poetry,” he consoled the poet. “You have been coming to our meetings for so many years. You are like family to me. I request the others to let him speak.”

So they did.

Next another woman got up. “Why has the company stopped the practice of taking shareholders on tours of company premises? Back in the day, when the President’s father used to be in charge, they used to conduct factory tours very frequently.”

The President had a quiver full of apologies. Did the woman have any particular plant in mind?

Of course. The factory in Goa. There was much applause. The company secretary was instructed to organise a trip as soon as possible. The mood in the mooch seats brightened considerably.

Finally there was the first question about business. Why did the company acquire a foreign plant instead of distributing the cash as dividend? This time one of the senior managers answered the question with dubious urgency and accuracy.

A colleague leaned over: “Planted question.”

And thus the next 15 minutes passed. Poetry interspersed with shameless praise of the board of directors sandwiched between planted questions. Until one terribly grumpy looking man stood up and asked why the AGM was scheduled the same day as HDFC Bank’s AGM.

“I am a shareholder in both companies. How can I attend both? You must understand…”

This finally managed to upset the President. “Conflicts are inevitable,” he said. “And if there is an overlap shareholders must pick whichever one they like.” The grumpy old man stood up, picked up a weathered old leather bag and left the auditorium.

The meeting concluded and we broke for snack boxes and tea in plastic cups.

The whole meeting was a bizarre, pointless exhibition of spoken word, poetry reading, conflict resolution, theatre and mooching.

Later some co-workers told me why so many people turned up at our office the day before: amateur blackmail. Many offered not to ask inconvenient questions, or ask convenient ones, in exchange for some petty cash or freebies.

It was a complete violation of the purpose of AGMs. But like Shenoy said, small investors rarely get another chance to capitalise on their loyalty.

Mani Ratnam’s Guru is a thinly veiled biography of Dhirubhai Ambani. Like Ambani, Ratnam’s hero, Gurukant Desai, also starts from poverty and manipulates, grafts, and in many cases intimidates his way into running one of the biggest companies in the country. The AGM is such an integral part of the Ambani legend, that Ratnam features it prominently in his movie. Choosing, even, to finish the film with a shot of a stadium full of shareholders.

Today, says Deepak Shenoy, the Ambani-style AGM is slowly petering out. A small group of front-benchers continue to wreak havoc during AGM season all over Mumbai but in most cases AGMs no longer matter. Institutional investors just pick up the phone and call up top management. Analysts get special sessions to discuss numbers. And media appearances and interviews are organised by PR companies.

“If you include TV channels, newspaper and websites there are some 31 or 32 media brands today handling business news in India,” says Govindraj Ethiraj. “This is probably one of the highest in the world.”

Saturated with so much information, many shareholders already know everything they need to.

For connoisseurs of Indian theatre, AGMs still offer good value. One share each in a handful of companies seems like a sound investment. In return you are guaranteed exclusive annual access to an artform in its twilight years. And snack boxes.