SEBI may permit promoter reclassification

“The regulator needs to clearly state the triggers based on which a company can reclassify a promoter as a normal public shareholder,” said Shriram Subramanian, founder and MD, InGovern Research Services, a proxy advisory firm.

“Also, the action thereafter in terms of whether the board needs to be reconstituted, number of independent directors should be increased or the directorship of such entities should be put to vote needs to be laid down. This is an important issue and some of the recent developments have brought to the fore the question whether promoters should voluntarily step down or seek a re-authorization from all shareholders,” added Mr. Subramanian.