Ministry of Corporate Affairs extension for conducting Annual General Meetings through Video Conferencing or other audio-visual means (‘OAVM’)
Companies registered under the Companies Act, 1956 or Companies Act, 2013 (‘Companies’) can now conduct their annual general meeting through Video Conferencing (‘VC’) or other Audio-Visual Modes (OAVM) till September 30, 2023. Ministry of Corporate Affairs (‘MCA’) vide its circular dated: December 28, 2022, has granted an extension to its earlier circular dated: May 5, 2022, vide which Companies were allowed to conduct AGM through VC or OAVM mode till December 31, 2022.
It needs to be highlighted here that Companies can conduct AGM through VC or OAVM mode only in compliance with provisions mentioned under MCA circular dated: May 5, 2020, read with MCA Circular dated: April 8, 2020, and MCA Circular dated: April 13, 2020.
MCA vide its circular dt: May 5, 2020, had initially allowed Companies to conduct AGM through VC or OAVM mode. This was due to the onslaught of COVID-19. Vide this circular MCA allowed Companies to conduct AGM through VC or OAVM mode till December 31, 2020.
MCA citing COVID-19 concerns time and again gave an extension to provisions of MCA Circular dated: May 5, 2020, vide circular dated: January 13, 2021, and December 14, 2021, thereby allowing Companies to conduct Annual General Meetings through VC or OAVM mode till certain time period. Vide its last extension circular dated: May 5, 2022, MCA allowed Companies to conduct AGM through VC or OAVM mode till December 31, 2022. Now in furtherance to this MCA has vide its circular dated: September 25, 2023, further granted extension to Companies till September 30, 2024.
It needs to be highlighted here that ‘Report of Company Law Committee, March 2022’ has at Point 8.5 of the report recommended incorporating provision for conducting AGM through VC or OAVM mode or hybrid mode in Companies Act 2013. So, it needs to be seen whether MCA continues to give an extension to the MCA circular on May 5, 2020, for conducting AGM through VC or OAVM mode till recommendations are incorporated in the Companies Act, 2013.
Citing MCA circulars as mentioned above that allowed Companies to conduct AGM through VC or OAVM mode, SEBI has been granting relaxations in compliance with certain provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 (‘LODR’). Recently, SEBI vide its circular dated: May 13, 2022, and May 16, 2022, granted relaxation in compliance with certain provisions of LODR viz. non-sending of proxy forms, sending of notices and annual report copies through emails, etc. These relaxations granted by SEBI will be expiring on September 30, 2023. So now it needs to be seen if SEBI further grants relaxation for compliance with certain provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 as MCA has now allowed Companies to conduct AGM through VC or OAVM mode.
Further, also one more point needs to be deliberated i.e. Whether companies who had already sent AGM or EGM or postal ballot notices in December’s first week for conducting AGM or EGM in physical mode, assuming that relaxations allowed as per MCA circular May 5, 2020, and MCA circular April 8, 2020, read with MCA circular dated: April 13, 2020, would not be continued, can these companies conduct meetings now through VC or OAVM mode as now MCA has now further extended relaxations of conducting meetings through VC or OAVM mode?
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