The special privileges granted to private equity (PE) investors by listed companies are set to go through shareholders test.
Under new rules introduced by the Securities and Exchange Board of India (Sebi), all such arrangements will require shareholders nod by way of special resolutions.
Legal experts say arrangements that are unfair to other public shareholders may not pass the muster.
Till now, companies enjoyed the discretion of determining whether a piece of information or event would be material enough to be disclosed to the public.
In all, nine sectors have been selected for the grant of such awards. This was done to limit the population of annual reports that we would have to go through, and also finetune the norms that we have adopted for selecting the winners.
There will be mainly 3 categories of companies in all the selected industry sectors such Large companies with a turnover of over Rs.5,000 crore; Medium sized ones with business volumes of over Rs1,000 crore, but up to Rs.5,000 crore; and Small ones with sales of over Rs.500 crore and not more than Rs.1,000 crore.