Dear All,
I believe all resolutions by listed companies need to pass by minimum 75% voting in favor of the resolution.
In case the promoter’s hold 75% of the company, does it indicate the minority shareholders cannot oppose the resolution and get the same cancelled ?
Also, can the voting results be manipulated by the company ?
Thank you for your guidance
regards
Sourabh
Resolutions are generally of two types - an ordinary resolution which requires more than 50% voting in favor and a special resolution which requires more than 75% voting in favor.
Section 114 of the Companies Act, 2013 defines an Ordinary and Special Resolutions.
It states:
(1) A resolution shall be an ordinary resolution if the notice required under this Act has been duly given and it is required to be passed by the votes cast, whether on a show of hands, or electronically or on a poll, as the case may be, in favour of the resolution, including the casting vote, if any, of the Chairman, by members who, being entitled so to do, vote in person, or where proxies are allowed, by proxy or by postal ballot, exceed the votes, if any, cast against the resolution by members, so entitled and voting.
(2) A resolution shall be a special resolution when— (a) the intention to propose the resolution as a special resolution has been duly specified in the notice calling the general meeting or other intimation given to the members of the resolution; (b) the notice required under this Act has been duly given; and © the votes cast in favour of the resolution, whether on a show of hands, or electronically or on a poll, as the case may be, by members who, being entitled so to do, vote in person or by proxy or by postal ballot, are required to be not less than three times the number of the votes, if any, cast against the resolution by members so entitled and voting.
Thank you,
AJ
Thank you. Just to understand your above points better in context of my query. For a company with promoter holding of 75% , all resolutions - ordinary or special - in 100% of resolutions, will essentially be passed if promoters want to pass the same ?
You are correct. However SEBI regulations requires all listed companies to have their promoter holding reduce to 75% or lower with in 3 years of listing.
AJ
For resolutions, where the promoter is interested…like his remuneration or family member’s remuneration or related party transactions, the interested parties cannot vote. The resolution has to be passed by simple a majority of other than interested parties (minority shareholders). Hope this helps.
Regards
SJ
Hi Shobhit,
Thanks for the earlier clarification. Can you help me understand the resolution of TBZ for salary increase of promoters ? The resolutions was passed as below :
However, the number of votes against the resolution was higher than no. of votes in favor (barring the promoter votes). This does not seems to be in line with your earlier clarification.
Thanks for your kind advice
regards
Sourabh
Thanks for your response @sjain_13. So the regulations do require related parties not to vote on the transactions. For this particular transaction, the following parties are interested in the resolution.
I have also enclosed an article which you may find useful. As far as the voting outcome is concerned, the resolutions were approved by ~91% of minority shareholder.
Regards
SJ
Thanks Shobhit for the feedback and the article. However, I was referring to resolution 9 (as against resolution 4 posted by you). Resolution 4 is appointment of MD (I think this is from last year).
Resolution 9 posted by me is from this year’s AGM. It can be seen that 503,435 votes were against the remuneration while only 63483 votes were in favor of resolution to increase the salary. These do not include promoter group votes. I think, this means that the resolution should not have been passed but it was not the case.
Can you please share your thoughts on this ? Thank you for your kind help
Dear Sourabh,
Thanks for your response and apologies for creating more confusion, than to provide clarity. I have sought advise from a legal professional on the matter. The simple majority of minority shareholders is required for two kind of resolutions only
Regards
SJ
