The Union Ministry of Corporate Affairs is working towards facilitation of on-line voting on resolutions placed before shareholders at an annual general meeting. This facility would soon be given to minority shareholders including FIIs, which do not reside at the location of the AGM or the location of the registered office. The Ministry, in consultation with the market regulator, the two depositories and other market experts, is giving final shape to the appropriate modalities. According to sources in the Ministry, this move will, however, require suitable changes in the relevant statutes – the Companies Act and the Depositories Act. Amendment “While the necessary changes will be incorporated in the Companies Bill, which will be placed before Parliament in the next session, amendment in the Depositories Act is likely to be moved simultaneously,” a senior Ministry official said. Mr Prithvi Haldea, the CMD of Prime Database, who is involved in the deliberation process, told Business Line that the a new software has already been put in place to facilitate such depository level activity. “When the facility would become fully functional, it would pave way for a cheaper and faster transition to electronic voting from voting through show of hands and postal voting, now in vogue,” he said. According to market participants, such voting would be through depository participants, who would act as an interface between investors and the depositories – National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL). Market sources said a new electronic platform, which would be created for the purpose at the level of a depository, would also facilitate prompt uploading of corporate announcements regarding AGM and notice of resolutions. According to a recent report, by the Asian Corporate Governance Association (ACGA), overseas investors specifically face problems in terms of timely access to AGM agenda of local companies, including the blue-chips. ACGA, which represent large number of FIIs in India, sought on-line access to such information 21 days before the events to facilitate expression of cross-border proxy rights, other than the show of hands, at an AGM or through postal ballots. Mr C.V. Desai, Chairman of the banking and the capital market committee of Bharat Chamber of Commerce, who discussed the subject with the Corporate Affairs Minister, Mr Salman Khurshid, on Saturday, said the Ministry was actively trying to remove the existing bottleneck at the earliest in the interest of improving corporate governance standards of the country. The Minister also indicated that ways to protect the minority shareholders' interests in finance companies, de-merged from listed entities, was also being considered by the Ministry. Mr Haldea said that such de-mergers have hurt the small investors and suitable statutory provisioning was being proposed for interventions by the authorities in such cases.
