Lawyer Monthly Magazine - July 2019 Edition

2015 (“SEBI LODR Regulations”) shall comprise of independent directors. (ii) Audit committee shall comprise of only independent directors. (e) Coat-tail Provisions: Post- IPO, the SR equity shares shall be treated as ordinary equity shares in terms of voting rights (that is one SR share shall have only one vote) in the following circumstances: (i) Appointment or removal of independent directors and/or auditor; (ii) In case where promoter is willingly transferring control to another entity; (v) SR shares have been held for a period of at least 6 months prior to the filing of red herring prospectus (RHP). (vi) SR shares have voting rights in the ratio of minimum 2:1 to maximum 10:1 compared to ordinary shares. (b) Listing and Lock-in: SR shares shall also be listed on Stock Exchanges after the issuer company makes a public issue. However, SR shares shall be under lock-in after the IPO until their conversion to ordinary shares. Transfer of SR shares among promoters shall not be permitted. No pledge/ lien shall be allowed on SR shares. (iii) Related party transactions in terms of SEBI (LODR) Regulations involving SR shareholder; (iv) Voluntary winding up of the company; (v) Changes in the company’s Article of Association or Memorandum of Association - except any changes affecting the SR instrument; (vi) Initiation of a voluntary resolution plan under the Insolvency and Bankruptcy Code, 2016; (vii) Utilization of funds for purposes other than business; (viii) Substantial value transaction based on materiality threshold as prescribed under SEBI (LODR) Regulations; (ix) Passing of special resolution in respect of delisting or buy- back of shares; and (x) Any other provisions notified by SEBI in this regard from time to time. (f) Sunset Clauses: SR shares shall be converted into ordinary shares in following circumstances/ events: (i) Time Based: The SR shares shall be converted to Ordinary Shares on the 5th anniversary of listing. The validity can be extended once by 5 years through a resolution. SR (c) Rights of SR shares: SR shares shall be treated at par with the ordinary equity shares in every respect, including dividends, except in the case of voting on resolutions. The total voting rights of SR shareholders (including ordinary shares), post listing, shall not exceed 74%. (d) Enhanced corporate gov- ernance: Companies having SR shareholders shall be subject to enhanced corporate govern- ance as follows: (i) At least ½ of the Board and 2/3rd of the committees (excluding audit committee) as prescribed under SEBI (List- ing Obligations and Disclosure Requirements) Regulations, Contact Vineet Aneja, Managing Partner | Clasis Law M: +91-9810405782 | E: vineet.aneja@clasislaw.com Firm Profile The firm, Clasis Law is a full service Indian law firm that is international in vision, scope, experience and capability. The core values of the firm include a high degree of legal expertise, commitment to excellence, efficiency, integrity, focus and client care, all of which guide each member of the firm, be it the partners, associates or staff of Clasis Law in their business dealings on a daily basis. With the in-depth expertise and know-how of the partners, together with highly trained teams, the firm is able to provide clients with bespoke solutions and exceptional service. Expertise within the firm spans a range of practice areas including corporate and commercial transactions, aviation & aerospace, banking & finance, asset & project finance, insurance, infrastructure, real estate, intellectual property, employment law, competition, compliance & auditing, shipping & international trade law, TMT, litigation & dispute resolution and white collar. The firm acts for a diverse domestic and international client base across a number of industrial sectors. Further details on the full spectrum of the firm’s experience and expertise across practice areas and industry sectors can be found on the Clasis Law website. 28 Special Feature JUL 2019 www. lawyer-monthly .com