Shareholders are the owners of the corporations. Shareholders have the right to access and examine the corporate records and information concerning the governance and financial performance of the corporate. With the changing time shareholders are increasing their active engagement in the corporations. Participation of the shareholders has increased with the e-voting implication under the Companies Act, 2013 (Act), it has made easier to raise their opinions on the critical corporate matters.

In a recent blow there have been instances where the shareholders have got down on the resolutions put before them. The majority being resolutions empowering the Board and appointments in the same, related Party transactions (RPT’s), amendments in the Articles and or Memorandum of the company.

As on the date, 66 resolutions have been defeated by the shareholders since January, 2014.

Minority-Shareholders-Activism-Resolutions-1

What made it possible?

Primary reasons

  1. Law protecting the Minority and powers of Shareholders
  2. Participation by the Private Equity Investors (PE), Institutional Investors (II) Mutual and Pension Funds Investors.

Secondary reasons

  1. E-voting Facility
  2. Educated and well informed shareholders

Protection of Minority and Powers of the shareholders

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