Sebi makes e-voting mandatory for top 500 listed companies

 The Securities and Exchange Board of India (Sebi) on Tuesday decided to make it mandatory for top 500 listed companies to facilitate e-voting that makes it easier for shareholders to participate in key decisions without being physically present in the meetings.

In a statement after its board meeting here, Sebi said, “In line with the budget proposal...to make it mandatory for top-listed companies to provide for electronic voting facilities, it has been decided to implement the said proposal by making electronic voting mandatory...in respect of those businesses to be transacted through postal ballot.”
Further, the market regulator said the decision would be implemented in a phased manner, beginning with “top 500 listed companies at BSE and NSE based on market capitalisation. Listed companies may choose any one of the agency which is currently providing the e-voting platform.”

Besides, Sebi said that in order to enhance the quality of financial reporting done by listed entities it would create a Qualified Audit Report Review Committee (QARC) represented by accounting regulator ICAI and stock exchanges.

The committee would process qualified annual audit reports filed by the listed entities with stock exchanges and reports where accounting irregularities have been pointed out by Financial Reporting Review Board of the Institute of Chartered Accountants of India (ICAI-FRRB).

Cases wherein the qualifications are significant and explanation given by the company is unsatisfactory, they would be referred to the ICAI-FRRB, it said. “If ICAI-FRRB opines that the qualification is justified, Sebi may mandate a restatement of the accounts of the entity and require the entity to inform the same to the shareholders by making the announcement to stock exchanges,” it said.

Sebi also said it has modified the minimum subscription requirements for the IPOs of infrastructure companies to 90 per cent, subject to allotment of minimum 25 per cent or 10 per cent, as the case may be, of the securities offered to the public.

25 per cent public holding

Further, Sebi effected changes in rules governing the Offer For Sale (OFS) or Institutional Placement Programme (IPP) mechanism through stock exchange to help companies meet next year’s public shareholding deadline.  As per the Sebi deadline, listed firms from the private sector need to have minimum 25 per cent public shareholding by June 2013 and state-owned firms a minimum 10 per cent public float by August 2013.

Among other things, Sebi relaxed the mandatory time gap requirement between two IPPs within the cooling period of plus or minus 12 weeks, while maintaining a gap of two weeks between two successive OFS or IPP. This will help companies conduct share sales in more tranches depending upon the market conditions and investor appetite.