The amended regulation has set out an easy mechanism wherein public shareholders are entrusted with powers to appoint/ remove independent directors in case the shareholders fail to vote in favour of respective resolution.
As per Regulation 25(2A) of SEBI (LODR) Regulations 2015, the appointment, re-appointment or removal of an independent director of a listed entity, was subject to the approval of shareholders by way of a special resolution. As per the new proviso to sub-regulation 2A introduced by SEBI, where a resolution proposed for appointment/removal of Independent Director fails to get requisite majority (Special Resolution), then the resolution shall be tested for complying with following two conditions-
• Simple majority (Ordinary Resolution)
• Votes cast by the public shareholders in favour of the resolution exceed the votes cast against the resolution
If the aforesaid conditions are complied with, then the resolution proposing appointment shall be considered as passed.
Same condition shall also apply for removal of Independent Director appointed under the aforesaid alternate thresholds.
No doubt, the new thresholds would act as a protective shield for independent directors in listed companies wherein majority of the affairs of the Company are controlled by promoters.
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