New Delhi, Jun 11 (PTI) Markets regulator Sebi on Friday directed Majestic Auto to keep the appointment of three independent directors in abeyance.
As per an interim order, prima facie, Majestic Auto was not in compliance with the processes of appointment of independent directors (IDs).
"Majestic Auto Limited is directed to ensure that the appointment of Mr Anil Thapar, Mr Sanjeev Krishna Sharma and Mr Yogendra Kumar Gupta as Independent Directors on the Board of the Company pursuant to the EGM dated May 08, 2021, shall not be further acted upon and shall be kept in abeyance," it said.
It further directed the company to continue with the composition of the board of the company as it was in existence prior to the extraordinary general meeting.
The process of appointment of ID, which mandatorily includes the process of placing such proposals before the Nomination and Remuneration Committee (NRC) and obtaining the opinion of the board of directors, before it is placed for approval by the shareholders in the general meeting has not been followed, Sebi said.
The appointment of the three persons proposed by the requisitionist shareholders (Anadi Investment, Renuka Munjal and few public shareholders) has been placed for the approval of the shareholders is in glaring and gross deviations of as well as by way of circumvention of the mandatory provisions of law governing the appointment of IDs, the regulator said.
Anadi Investment Pvt Ltd and Renuka Munjal are the promoters of the firm and hold a 75 per cent stake.
"It raises serious doubts not only on the legal validity of such appointment but also on the fairness and independence essentially required to be followed by a listed company, when it comes to the appointment of directors, particularly in the appointment of ID," Sebi said.
It also cannot be overlooked that in the entire process that was adopted by the requisitionist shareholders to convene and get the names of their proposed candidates approved in the general meeting by side-stepping the laid down processes as prescribed under the law, the company under the management of the CMD has committed serious violations of law, it said in the order.
In the entire process, Mahesh Munjal, chairman and managing director (CMD), remained a highly conflicted person, as per the order.
It appears that he allowed his vested interest as a promoter shareholder (through Anadi), representing the majority stake to prevail and dominate over his statutory responsibilities, Sebi said.
The company may file its objections/reply, if any, within 14 days, Sebi said while passing the interim order.
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