SEBI introduce minority-centric provisions for appointment and removal of Independent Directors
The SEBI recently released Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2022 amending various provisions related to appointment and removal of Independent Directors, disclosure of quarterly financial results with certain line items, utilisation of the issue proceeds of non-convertible securities, Draft Scheme of Arrangement and Scheme of Arrangement among others.
As per the latest provisions, where a special resolution for the appointment of an independent director fails to get the requisite majority of votes but the votes cast in favour of the resolution exceed the votes cast against the resolution and the votes cast by the public shareholders in favour of the resolution exceed the votes cast against the resolution, then the appointment of such an independent director shall be deemed to have been made.
Further an independent director shall be removed only if the votes cast in favour of the resolution proposing the removal exceed the votes cast against the resolution and the votes cast by the public shareholders in favour of the resolution exceed the votes cast against the resolution.
