India Inc backs e-voting, but transparency still an issue
e-Voting platform launched by CDSL Ventures Ltd (CVL), the cost affective, convenient and quick mode of getting shareholders approval has found favour with India Inc.business Updated: Nov 19, 2009 22:56 IST
e-Voting platform launched by CDSL Ventures Ltd (CVL), the cost affective, convenient and quick mode of getting shareholders approval has found favour with India Inc. While being hailed by the corporate sector as a step in the right direction, market players and analysts are sceptical of its success.
Calling the e-voting a welcome step as an addition to the present system of postal ballots, Rahul Bajaj, chairman, Bajaj Group said, “To implement this, many amendments would be required in Companies Bill which is presently discussed by the parliament standing committee.”
The bill is likely to be introduced in the Budget or Monsoon session of Parliament. By the time it becomes an act, it would be later part of 2010. The platform launched by CDSL is an enabler, however, until there is an act to the effect, it cannot be made mandatory for companies to get shareholder approval through e-voting.
“It is a great step forward. I would also like balancesheets and other such information to be provided to shareholders online. Paper ballot and sending of balancesheets physically is such a waste of resources. It’s not only expensive but also time consuming,” said Amar Lulla, joint managing director, Cipla Ltd.
“If this system could be made effective, the corporate working would smoothen. How fast and effectively this can be implemented is to be seen,” said Adesh Gupta, chief financial officer of Grasim.
Bajaj also said that savings in cost will due to e-voting be insignificant, because initial posting to shareholders could not be avoided, as not all investors would be having computers. “From environmental point of view and as a step towards technology, this is good move, but would take time,” Bajaj said.
While shareholders would obviously love the idea of easy and quick voting, some corporates might have reservations regarding transparency issues, said an analyst. Also, issues such as meek shareholder activism and investor education might impede success of this system.
“Minority shareholders are not much active in India and shareholder activism is often promoter driven. We need more investor education along with platforms like this to increase shareholder participation in the decision making process,” said Harendra Kumar, Head of Institutional Broking, Global Research at Elara Capital.