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The Tax Publishers SEBI (Informal Guidance) Scheme, 2003--Promoters Ineligibility of Promoters Daughters Holding More than 10% of Voting Rights to Seek Re-classification From Promoter Group to Public Category, Irrespective of Their Marital Status Pragya Lalwani Learned Author in this article elucidates the informal guidance being provided by SEBI on demand as to whether a person being immediate relative of promoter holding more than 10% of voting rights in the listed company, can be re-classified from promoter group to public, due to their non-involvement in the companys operations and management. 1. Background A company, Mirza International Limited with its shares listed on BSE and NSE, has sought an informal guidance from SEBI vide its letter dt. 12-3-2020 regarding re-classification of status from Promoter/Promoters Group to Public. In the matter of fact, Mr. Rashid Ahmed Mirza, being promoter and Managing Director(MD) of the company holding 11.27% shares of it, as on 31-12-2019, desired to gift some of his shares to his two married daughters who live their independent lives and not being involved in the management of company. Also as they do not held any share till such date, their names do not form part of Promoter/Promoter group as per the shareholding pattern filed with Stock Exchanges under regulation 31 of the SEBI (LODR) Regulations, 2015. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

SEBI (Informal Guidance) Scheme, 2003--Promoters

Ineligibility of Promoters Daughters Holding More than 10% of Voting Rights to Seek Re-classification From Promoter Group to Public Category, Irrespective of Their Marital Status

Pragya Lalwani

Learned Author in this article elucidates the informal guidance being provided by SEBI on demand as to whether a person being immediate relative of promoter holding more than 10% of voting rights in the listed company, can be re-classified from promoter group to public, due to their non-involvement in the companys operations and management.

1. Background

A company, Mirza International Limited with its shares listed on BSE and NSE, has sought an informal guidance from SEBI vide its letter dt. 12-3-2020 regarding re-classification of status from Promoter/Promoters Group to Public. In the matter of fact, Mr. Rashid Ahmed Mirza, being promoter and Managing Director(MD) of the company holding 11.27% shares of it, as on 31-12-2019, desired to gift some of his shares to his two married daughters who live their independent lives and not being involved in the management of company. Also as they do not held any share till such date, their names do not form part of Promoter/Promoter group as per the shareholding pattern filed with Stock Exchanges under regulation 31 of the SEBI (LODR) Regulations, 2015.