scrutinizer – Corporate Laws - PPT.pptx

scrutinizer – Corporate Laws

1. 1 RRR CHAMBERS Email ID- [email protected] RRR Chambers - [email protected]

2. 2 The Companies Act,1956 Listing Agreement SEBI -Delisting Guidelines 2009 Companies (Court) Rules scrutinizer – Corporate Laws RRR Chambers - [email protected]

3. 3 Who can be a “Scrutinizer” The person so appointed is independent person and is not interested in the subject matter of the resolution. scrutinizer may be : a retired judge Practicing Company Secretary Any other independent competent professional Scrutinizer is a person appointed by the Chairman of the General Meeting or by the Board of a company to scrutinize the process of voting. RRR Chambers - [email protected]

4. 4 Need for a Scrutinizer In a country like India wherein majority of shareholders are largely inactive on the exercise of their voting. The role of a Scrutinizer is also to ensure that noncontrolling shareholders are protected from exploitation by insiders and controlling shareholders”, and that preventing such exploitation is “the most serious corporate governance challenge. RRR Chambers - [email protected]

5. 5 Instances of Scrutinizer Demand for Poll Postal Ballot Process Appointment by Company Law Board Appointment by High Court for Court Convened Meeting(s) in regard to a Scheme of Arrangement/Reconstruction RRR Chambers - [email protected]

6. 6 “Scrutinizer” can be appointed for following events … Contd… DEMAND FOR POLL: Two Scrutinizer should be appointed. One of them should be member of the company. Should not be employee or officer of the company. DEMAND FOR POSTAL BALLOT : One Scrutinizer should be appointed. He should not be in employment of the company. He will be in position for a period of 35 days from the date of issue of notice of annual general Meeting. RRR Chambers - [email protected]

7. 7 “Scrutinizer” can be appointed for following events … Contd… APPOINTMENT BY COMPANY LAW BOARD : Company Secretaries in Practice as proficient persons for the purpose of scrutinizing the process Company Law Board is now a days recognizing the Company Secretaries in Practice as proficient persons for the purpose of scrutinizing the process of voting adopted at the General Meeting of Company in the matters relating to the Section 397/398 of the Companies Act, 1956 RRR Chambers - [email protected]

8. 8 “Scrutinizer” can be appointed for following events … Contd… APPOINTMENT BY HIGH COURT FOR COURT CONVENED MEETING(S) IN REGARD TO A SCHEME OF ARRANGEMENT / RECONSTRUCTION : In case of a Scheme of Arrangement/Reconstruction of company(s)the High court orders a meeting of shareholders or class of shareholders or creditors of the Company Scrutinizes the voting mechanism adopted at the meeting. Submits a report to the High Court conveying the outcome of the meeting RRR Chambers - [email protected]

9. 9 JUDICIAL PRONOUNCEMENTS M/s. HCL Info systems Limited - Demerged company HCL Technologies Limited - Resulting company HCL Infinite Limited - Transferee company. Present Case : Company Secretary was appointed as one of the scrutinizer Mr. D.C. Kottayam, member was appointed as the other scrutinizer by the Chairperson.  Query Raised : Contended that both the scrutinizers are the employees of the company which violated the provisions of Section 184 of the Companies Act.   Applicability : As per “Section 184” one of the two scrutinizers appointed by the Chairperson should be the member and not an officer or an employee of the company present at the meeting. RRR Chambers - [email protected]

10. 10 JUDICIAL PRONOUNCEMENTS … Contd … Conclusion: It is proved and admitted that Mr. D.C. Kottayam is a contractor/consultant.   He was present in the meeting not as an employee of the company but as a member.  When the Chairperson was satisfied that he was not an employee of the company and thereafter was appointed as one of the scrutinizers. RRR Chambers - [email protected]

11. 11 Scrutinizers at poll Where a poll is to be taken, the chairman of the meeting shall appoint two scrutinizers The chairman shall have power to remove a scrutinizer from office. One of the two scrutinizers appointed under this section, shall always be a member (not being an officer or employee of the company) RRR Chambers - [email protected]

12. 12 Manner of taking poll and result Chairman of the meeting shall have power to regulate the manner in which a poll shall be taken The result of the poll shall be deemed to be the decision of the meeting. RRR Chambers - [email protected]

13. 13 Postal Ballot ??? Postal Ballot” includes voting by share holders by postal or electronic mode No obligation of voting personally by presenting for transacting businesses in a general meeting of the company. RRR Chambers - [email protected]

14. 14 Postal Ballot pursuant to Section 192A Every Listed Public Company should in respect of any other item of business as may be decided by the Board and its Members. It shall obtain the approvals of its Members by means of voting through Postal Ballot It can be Ordinary or Special Resolution RRR Chambers - [email protected]

15. 15 Steps involved in the Postal Ballot Process Notice  of Board meeting to all the Directors along with agenda. Convene Board Meeting. Approval of notice of the Resolution along with the Explanatory Statement. Authorize Company Secretary or any Director to issue the notice and Supervising process of postal ballot. Appointment of a Scrutinizer. Authorizing Managing/ Whole time Director fix the remuneration of Scrutinizer. RRR Chambers - [email protected]

16. 16 Steps involved in the Postal Ballot Process …. contd Determining the date for reckoning voting rights ascertain the Shareholders to whom the Notice and Postal Ballot Forms should be sent Time within which the Forms should be dispatched and returned by the Shareholders. Authorizing a Company Secretary to retain custody of the Postal Ballot Forms received from the Scrutinizer. Date of announcement of Results RRR Chambers - [email protected]

17. 17 Steps involved in the Postal Ballot Process …. contd Approving Calendar Events assent or dissent within 30 days  of postage of notice Pre-paid Envelope for the shareholders to give their reply Notice either by Registered Post  acknowledge due or under  Certificate of Posting . Advertise in one leading English newspaper in on vernacular newspaper circulating in the State. The Scrutinizer should submit his report after the last date of receipt of the Forms. RRR Chambers - [email protected]

18. 18 Steps involved in the Postal Ballot Process …. contd Ballot papers should be kept in safe custody of Scrutinizer. Declaration of Results on the basis of the Scrutinizer’s Report, Record in the Minutes Book of proceedings of General Meetings including result of the voting. Display the results in the Notice Board of the Company. Submission of the same to ROC within 30days. A Resolution passed by Postal Ballot should not be rescinded. RRR Chambers - [email protected]

19. 19 PRECAUTIONS FOR POLL Keeping the accurate database of list of shareholders. Arranging the proxies. Through scrutiny of institutional shareholders their authorization. Checking of AOA Provisions. RRR Chambers - [email protected]

20. 20 PRECAUTIONS FOR POSTAL BALLOT Preparing of calendar of events. Notice to the members shall be sent by registered post acknowledgement due or any other method prescribed by Central Government Notice should include a Postage pre-paid envelope for facilitating the assent/ dissent of the shareholders. Ensure the signatures of the shareholders on the postal ballot forms should be tallied with that of the specimen signatures. RRR Chambers - [email protected]

21. 21 Appointed to report his findings and the facts on the meeting observed, Cannot give his opinion on the outcome of the meeting. Empowered to give opinion on the outcome of the meeting. Can give his opinion on the outcome of the meeting. Observer Scrutinizer Scrutinizer v/s Observer RRR Chambers - [email protected]

22. 22 FUTURE SCENARIO The profession of Company Secretaries has taken a new turn and is now days being recognized as Scrutinizer by the Company Law Board apex body governing the Company laws. The efforts of the Institute of the Company Secretaries of India (ICSI) to make the profession enter new ventures are fruitful. But we have to be more dynamic and active in approach to achieve higher scales of Successes. RRR Chambers - [email protected]

23. 23 CONCLUSION To conclude, I feel proud to mention that our profession of Company Secretaries is gaining recognition in the eyes of the Quasi Judicial Body as well. The role of a Scrutinizer being a highly accountable and responsible in nature, it is not wrong to say that the Character and Charisma of a Company Secretary is a perfect blend to deliver the results desired by the Corporate World and the Society at large. RRR Chambers - [email protected]

24. 24 WWW.b5consulting.com RRR Chambers - [email protected]