January 25, 2022
Summary of the notification issued by SEBI on 24/01/2022
SEBI amends LODR regulations
Key highlights of the amendment are as follows:
1. Board of Director/Manager appointment: Shareholders’ approval is required for appointment of ‘a manager’ at the next general meeting or within 3 months from the appointment date, whichever is earlier. Further, appointment or re-appointment of a person in the Board including MD, WTD or a manager, who was earlier rejected by the shareholders, shall be done only after prior shareholders’ approval. Explanatory statement to notice of such meeting to obtain shareholders’ approval to contain justification by NRC and Board for the person’s recommendation.
2. Monitoring agency’s report on utilization of funds from a public/rights issue shall be placed before the audit committee on a quarterly basis (as against existing requirement of ‘annual’ basis)
3. Share certificates/receipts/advices, in case of subdivision, split, consolidation, issuance of duplicates thereof etc. or issuance of new certificates/ receipts/advices, in cases of lost or worn-out certificates etc. shall be issued in dematerialized form only. Also, any claim by an allottee w.r.t unclaimed shares shall be credited to the demat account of the allottee, after due verification of such claim. The prevailing option to rematerialize into physical shares is done away with.
4. Transmission or transposition of securities held in physical or dematerialised form shall be effected only in dematerialised form. Existing provision to effect transmission in physical in physical mode is done away with.