The Board of Directors of Gama Ltd, a listed company appointed Reyon, as an Executive Director at the Board meeting held on June 1, 2023. The Company took up this appointment of Reyon, for approval of the shareholders at

According to section 161(1) of the Companies Act, 2013 (the Act), the articles of a company may confer on its Board of Directors the power to appoint any person, other than a person who fails to get appointed as a director in a general meeting, as an additional director at any time who shall hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier. As per the provisions of regulation 17(1C) of the SEBI (LODR) Regulations, 2015 , a listed entity shall ensure that approval of shareholders for appointment of a person on the Board of the company as a director or as a manager is taken at the next general meeting or within a time period of 3 months from the date of appointment, whichever is earlier. However, according to the 1st proviso to regulation 17(1C) , a public sector company shall ensure that the approval of the shareholders for appointment or re-appointment of a person on the Board of the Directors or as a Manager is taken at the next general meeting. Further the 2nd proviso to regulation 17(1C) provides that the appointment or a re-appointment of a person, including as a managing director or a whole-time director or a manger, who was earlier rejected by the shareholders at a general meeting, shall be done only with the prior approval of shareholders. Conclusion According to regulation 17(1C), a listed entity shall ensure that approval of shareholders for appointment of a person on the Board of the company as a director or as a manager is taken at the next general meeting or within a time period of 3 months from the date of appointment, whichever is earlier. Therefore, the approval was required to be obtained within a period of 3 months from June 1, 2023 which was not taken by the Gama Ltd. However, if Gama Ltd. is a Public Sector Company, the approval can be taken in the AGM held on September 29, 2023 in view of the 1st Proviso to regulation 17(1C). Further, according to 2nd proviso of regulation 17(1C), the appointment or a re-appointment of a person, including as a managing director or a whole-time director or a manger, who was earlier rejected by the shareholders at a general meeting, shall be done only with the prior approval of shareholders. Since, continuation of the original appointment of Reyon was not approved by the shareholders in AGM held on September 29, 2023, the appointment in the Board Meeting held on September 30, 2023 is not valid in light of the 2nd proviso to Regulation 17(1C).