The capital market regulator Securities and Exchange Board of India (SEBI) on Tuesday made it mandatory for top 500 listed companies to hold e-voting — a move that will widen shareholder participation in key decisions.
“In line with the Budget proposal, it has been decided to make the electronic voting mandatory for all listed companies in respect of those businesses to be transacted through postal ballot,” said the regulator in a statement.
It said the decision would be implemented in a phased manner, beginning with top 500 listed companies at the Bombay Stock Exchange and the National Stock Exchange based on market capitalisation.
In order to enhance the quality of financial reporting, the regulator said that it would create a Qualified Audit Report review Committee (QARC) represented by accounting regulator ICAI (Institute of Chartered Accountants of India) 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, would be referred to the ICAI-FRRB,” said Sebi. “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.
{{/usCountry}}“Cases wherein the qualifications are significant and explanation given by the company is unsatisfactory, would be referred to the ICAI-FRRB,” said Sebi. “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.
{{/usCountry}}The regulator also relaxed norms for Offer For Sale (OFS) — a new route introduced by Sebi early this year to help companies increase their public shareholding. Sebi has allowed a minimum gap of two weeks between two OFS issuances.