Sebi listing obligations and disclosure requirements
Querist :
Anonymous
(Querist) 11 September 2018
This query is : Resolved
Dear all,
The SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 amended Regulation 17 by inserting sub-regulation 1B and the same reads as follows:
“(1B) With effect from April 1, 2020, the top 500 listed entities shall ensure that the Chairperson of the board of such listed entity shall -
(a) be a non-executive director;
(b) not be related to the Managing Director or the Chief Executive Officer as per the definition of the term “relative” defined under the Companies Act, 2013:
Provided that this sub-regulation shall not be applicable to the listed entities which do not have any identifiable promoters as per the shareholding pattern filed with stock exchanges.
On the other hand the first proviso to Section 203 provides for same person to be appointed as Chairperson and Managing Director subject to certain conditions.
In view of the above, can it be said that the newly inserted Regulation is in contravention to Section 203 of the Companies Act, 2013.
Guest
(Expert) 11 September 2018
What specific secret is there in your query that compelled you to keep yourself anonymous that too, when you have not given any background of the case? Are you chairperson of MD of a company? Even if your are a Chairperson or MD, even then there was nothing secret in asking this academic query openly by revealing your ID.
However, in this respect, neither Section 203 of the Compnies Act is wrong, nor SEBI's Regulation is contradictory to that section or proviso thereunder.
In fact, you have the basic need at first to distinguish between the KMP and other than KMP in a company. Thereafter, another need arises for you to interpret the proviso, below Section 203 of the Act, very attentively.
Study the section, as a whole, very carefully, not merely the proviso, as of reading between the lines.
