The Board of directors of Vijay Ltd., a listed entity proposes to issue sweat equity shares to Ganesh, an employee belonging to the promoter's group. Ganesh also participated in the Shareholders' resolution for allotment
CS Executive · Securities Laws and Capital Markets · PYQS · December 2022
The Board of directors of Vijay Ltd., a listed entity proposes to issue sweat equity shares to Ganesh, an employee belonging to the promoter's group. Ganesh also participated in the Shareholders' resolution for allotment of sweat equity shares. By referring the relevant SEBI Regulations, answer the followings: Can Ganesh participate in the resolution (Give reason)?
Answer & Explanation:
As per Regulation 32 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the issue of sweat equity shares to employees who belong to promoter or promoter group shall be approved by way of a resolution passed by a simple majority of the shareholders in general meeting and the promoters/promoter group shall not participate in such resolution. Hence, in the given case, Ganesh, being an employee belonging to the promoter's group, cannot participate in the resolution for allotment of sweat equity shares.
Topics: Share Based Employee Benefits
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