Government relaxes norms for shares with differential voting rights

Union Ministry of Corporate Affairs (MCA) has amended provisions relating to issue of shares with Differential Voting Rights (DVRs) provisions under Companies Act. This move is aimed at enabling promoters of Indian companies to retain control of their companies in their pursuit for growth and creation of long-term value for shareholders, even as they raise equity capital from global investors.

Key changes made are

The existing cap of 26 % of total post issue paid up equity share capital raised to 74 % of total voting power in respect of shares with DVRs of a company.

The earlier requirement of distributable profits for 3 years for a company to be eligible to issue shares with DVR now has been removed.

Alongside above two changes, time period within which Employee Stock Options (ESOPs) can be issued by Startups recognized by Department for Promotion of Industry & Internal Trade (DPIIT) to promoters or Directors holding more than 10% of equity shares, has been increased from current 5 years to 10 years from date of their incorporation.

Background

Promoters/founders who are instrumental in starting up company often lose control of firm when they dilute their stakes to raise multiple rounds of funding. Differential Voting Rights do not follow common rule of one share-one vote. DVRs enable promoters to retain control over company even after many new investors come in, by allowing shares with superior voting rights or lower or fractional voting rights to public investors.

Month:  Categories: Business, Economy & Banking

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40 Indian Origin Youth take part in 54th Know India Programme

40 Indian Origin youth have taken part in 54th Edition of Know India (KIP) Programme. This edition is scheduled from 1st August to 25th August, 2019. Punjab and Harayana are partner sates for this edition. These 40 participants are from 9 countries, namely Fiji (7), Trinidad & Tobago (7), Mauritius (7), Guyana (6), Suriname (5), Myanmar (3), South Africa (2), Israel (2) and Reunion Island (1) out of which 26 are female and 14 are male.

About Know India Programme (KIP)

It is important initiative of Union Government aimed to engage and make students and young professionals of India Diaspora in age group of 18-30 years. It was launched in 2004. It is 25-day orientation programme organized by Union Ministry of External Affairs (MEA) in partnership with one or two States including visit to States for 10 days. It seeks to give sense of connect to Indian origin youth with their motherland and motivate and inspire them by the transformation taking place in India.

Objective of KIP: (i) Give Indian origin youth exposure to various aspects of contemporary India’s forms of art, heritage and culture. (ii) Promote awareness on different facets of life in India and the progress made by country in various fields such as industry, education, science and technology, information & communication technology (ICT), climate and power and renewable energy etc.

Selection of Participants: They are selected on basis of nominations recommended by the Indian Missions or Posts abroad.

Implementation Status: Since 2004, MEA has conducted 53 editions of KIP with participation of 1821 Overseas Indian youth.

Month:  Categories: Government Schemes & Projects

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