New Delhi: Providing video-conferencing facility to shareholders to participate in annual general meetings will not be mandatory for listed companies, the Ministry of Corporate Affairs (MCA) said Tuesday, reversing its earlier direction.
In June, MCA had said video-conferencing of shareholders meeting would be mandatory for listed companies from the next financial year.
However, Tuesday it said the direction was "in variance" with the Companies Act, 1956, and the proposed Companies Bill, 2011, and henceforth video-conferencing would not be compulsory.
"On re-examination of the matter, it has accordingly been decided that the mandatory requirement for holding shareholders meetings through video conferencing shall continue to be optional for listed companies for the subsequent years too," MCA said in a circular.
The move on video-conferencing, which is part of MCA's Green Initiative Campaign for Corporate Governance, was aimed at providing larger participation and also help curbing costs.
Video conference facility enables persons participating in a meeting to communicate concurrently with each other without an intermediary, and to participate effectively in the meeting.
The circular further said that the MCA would not authorise any agency for the purpose of providing video-conferencing facility by the corporates.
In June it had said that National Security Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL) would provide electronic platform for e-voting.
According to section 166 of the Companies Act, 1956, a company is required to have its Annual General Meeting either at the registered office of the company or at place within the city, town or the village in which registered office of the company is situated.
Section 174 provides that at least five members in case of public company and two members in case of other company have to be personally present and shall be the quorum for the general meeting.
First Published: Tuesday, December 27, 2011, 22:53