Securities And Exchange Board Of India - Subsection
Section 31A(3) in Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
(3)Re-classification of status of a promoter/ person belonging to promoter group to public shall be permitted by the stock exchanges only upon satisfaction of the following conditions:(a)an application for re-classification to the stock exchanges has been made by the listed entity consequent to the following procedures and not later than thirty days from the date of approval by shareholders in general meeting:(i)the promoter(s) seeking re-classification shall make a request for re-classification to the listed entity which shall include rationale for seeking such re-classification and how the conditions specified in clause (b) below are satisfied;(ii)the board of directors of the listed entity shall analyze the request and place the same before the shareholders in a general meeting for approval along with the views of the board of directors on the request:Provided that there shall be a time gap of at least three months but not exceeding six months between the date of board meeting and the shareholder's meeting considering the request of the promoter(s) seeking re-classification.(iii)the request of the promoter(s) seeking re-classification shall be approved in the general meeting by an ordinary resolution in which the promoter(s) seeking re-classification and persons related to the promoter(s) seeking re-classification shall not vote to approve such re-classification request.(b)the promoter(s) seeking re-classification and persons related to the promoter(s) seeking re-classification shall not:(i)together, hold more than ten percent of the total voting rights in the listed entity;(ii)exercise control over the affairs of the listed entity directly or indirectly;(iii)have any special rights with respect to the listed entity through formal or informal arrangements including through any shareholder agreements;(iv)be represented on the board of directors (including not having a nominee director) of the listed entity;(v)act as a key managerial person in the listed entity;(vi)be a 'wilful defaulter' as per the Reserve Bank of India Guidelines;(vii)be a fugitive economic offender.(c)the listed entity shall:(i)be compliant with the requirement for minimum public shareholding as required under regulation 38 of these regulations;(ii)not have trading in its shares suspended by the stock exchanges;(iii)not have any outstanding dues to the Board, the stock exchanges or the depositories.
