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SEBI moots proposal on appointment of managing director

The company's shareholders reject the candidature of the persons again, such persons cannot be considered for appointment as director or continue as a director for two years.

January 27, 2021 / 07:14 PM IST
SEBI headquarters (Representative image)

SEBI headquarters (Representative image)

Seeking to put in place stricter norms, SEBI on Wednesday proposed that a person rejected by a listed company's shareholders as a managing director or whole-time director can be appointed or re-appointed to the posts only after the company fulfils various conditions, including providing detailed justifications.

In case, the company's shareholders reject the candidature of the persons again, such persons cannot be considered for appointment as director or continue as a director for two years.

The proposals are part of a discussion paper floated by SEBI.

Under the proposal, if a person whose appointment or re-appointment as a managing director (MD) or whole-time director (WTD) has been rejected by the shareholders of a listed firm should not be appointed again on such post unless certain conditions are satisfied, SEBI said in a consultation paper.