Appointments / Re-appointments earlier rejected by Shareholders shall be done with Prior Approvals: SEBI [Read Notification]

The Securities and Exchange Board of India (SEBI) has notified that the Appointment or re-appointment of persons earlier rejected by shareholders at general meeting to be done only with prior approval of shareholders.

The Board has notified the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2022 which seeks to amend the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, in regulation 17, in sub-regulation (1C), after the words “Board of Directors” the words “or as a manager” shall be inserted;  in sub-regulation (1C), the provisos shall be inserted, namely, “Provided that the appointment or a re-appointment of a person, including as a managing director or a whole-time director or a manager, who was earlier rejected by the shareholders at a general meeting, shall be done only with the prior approval of the shareholders: Provided further that the statement referred to under sub-section (1) of section 102 of the Companies Act, 2013, annexed to the notice to the shareholders, for considering the appointment or re-appointment of such a person earlier rejected by the shareholders shall contain a detailed explanation and justification by the Nomination and Remuneration Committee and the Board of directors for recommending such a person for appointment or re-appointment.”

In regulation 40, in sub-regulation (1), the existing proviso shall be substituted with the following, namely “Provided that requests for effecting transfer of securities shall not be processed unless the securities are held in the dematerialised form with a depository: Provided further that transmission or transposition of securities held in physical or dematerialised form shall be effected only in dematerialised form.” In sub-regulation (3), in the first proviso, the words “for securities held in dematerialized mode and physical mode” and the words “and twenty one days respectively” shall be omitted.

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