Kanakamedala Ravindra Kumar, a Rajya Sabha MP belonging to Telugu Desam Party (TDP) from Andra Pradesh, has written to the Ministry of Corporate Affairs (MCA) seeking relaxation of SEBI norms with regard to appointment of directors aged 75 years and above. Kumar in his letter, seen by BusinessLine , has said that SEBI’s diktat was in contradiction to the Companies Act 2013, and may lead to additional cost burden for companies to call for special shareholder meeting just to pass a single resolution.

From April 1, listed companies may no longer be able to continue having directors aged 75 years and above, according to a SEBI order, unless they pass a special resolution and seek shareholder permission.

Citing costs involved for companies in organising special shareholder meet for a single resolution to follow SEBI’s deadline, Kumar has requested the MCA that instead SEBI should allow continuation of directors aged 75 years and above up to the next shareholder meet when a resolution can be passed.

Also, Kumar argues that SEBI’s new norms are contradictory to the Companies Act 2013 “in the sense that if a board wants to appoint a new director who has attained 75 years of age as an additional director, then no prior special resolution is required under Section 161 but new SEBI norms make it mandatory to pass special resolution.”

110 firms in queue

BusinessLine had reported on March 12 that more than 110 ‘top listed’ companies may have to change their board composition or seek shareholder approval if they want to continue to have one or more persons aged 75 years or more as non-executive director on their board. This apart, there are several small companies that may now have to call special board and shareholder meet, which involves cost. SEBI says any company that desires to continue such non-executive board members will have to take shareholder permission through a special resolution and even record the reason for such an act.

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