From China to Canada, from U.K. to U.S.A., from Senegal to Singapore, from Italy to India – the entire world has been fighting incessantly with the pandemic, the novel Corona Virus, that has been given the nomenclature of COVID-19 by the World Health Organization. It is a global health crisis, affecting all and sundry, and the numerous ways in which the countries worldwide are attempting to stymie the disease's outbreak are wide-ranging and commendable.
The COVID-19 cases have risen drastically since the last month, hurting major economies and disrupting supply chains, including that of India. Since the advent of COVID-19 in India, our economy has been crumbling, especially the equities market. On March 23, 2020, both S&P BSE Sensex and the NSE Nifty 50 ended with their worst ever one-day decline. The 30-scrip Sensex fell 13.15% to 25,981, the lowest level since December, 2016. The 50-stock Nifty fell 12.98% to end at 7,610, the lowest level since April, 2016. All 50 stocks ended on that day with cuts, with four of them falling over 20%.
In light of the current dismal situation of the country, culminating into a complete lockdown now, it became imperative for the government to introduce relaxations in compliances of applicable statutes, so that the corporate sector is able to cope up with the financial and other losses, and does not have to bear the brunt of the pandemic leading to their breakdown as well.
In response to the increasing pandemic, relaxations have been granted from certain regulatory compliances under the Companies Act, 2013 ("CA, 2013"), Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 ["SEBI (LODR) Regulations, 2015"], Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ["SEBI (SAST) Regulations, 2011"], and the Insolvency and Bankruptcy Code, 2016 ("IBC").
The key relaxations in the regulatory compliances have been discussed in brief, hereunder :
"Disaster management, including relief, rehabilitation and reconstruction activities."
(i) the approval of the annual financial statements;
(ii) the approval of the Board's report;
(iii) the approval of the prospectus;
(iv) the Audit Committee Meetings for consideration of financial statement including consolidated financial statement if any, to be approved by the board under sub-section (1) of section 134 of the Act; and
(v) the approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.
Provided that where there is quorum presence in a meeting through physical presence of directors, any other director may participate conferencing through video or other audio visual means.
SEBI has provided several relaxations vide its Circulars of March 23, 2020 and March 26, 2020.
The key relaxations have been presented in the form of a table below :
Relaxation for 3 months
Due Date : March 31, 2020
Extended Date : June 30, 2020
Every person, who together with persons acting in concert with him, holds shares or voting rights entitling him to exercise twenty-five per cent or more of the voting rights in a target company, shall disclose their aggregate shareholding and voting rights as of the thirty first day of March, in such target company in such form as may be specified.
The promoter of every target company shall together with persons acting in concert with him, disclose their aggregate shareholding and voting rights as of the thirty first day of March, in such target company in such form as may be specified.
The promoter of every target company shall declare on a yearly basis that he, along with persons acting in concert, has not made any encumbrance, directly or indirectly, other than those already disclosed during the financial year.
The various relaxations provided by the regulatory authorities and the judiciary of India, were indeed the need of the hour considering the current economic and health conundrum that is rampant and the future seeming unpredictable. With such radical amendments and relaxations, we can surely see a silver-lining that will help our crippling economy in recuperating, in times to come, navigating through the choppy waters, and becoming strong once again.
Views Are Personal Only.
Author is a Practising Company Secretary, working as a Partner of MKB & Associates.
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