Welcome To The World of E-Voting!
Welcome to the world of E-voting. In an attempt to enhance shareholder participation SEBI has mandated that the top 500 listed companies on BSE & NSE will here onwards facilitate electronic voting by their shareholders for all postal ballot resolutions. Some companies have already gone the e voting way. Now with many more set to join the fray, Payaswini Upadhyay finds out how it works and who it works for?
Only 2.37% of 3i Infotech's shareholders voted via postal ballot on the company's resolution to increase its share capital
Bajaj Sorporation's IPP resolution received just 1.06% votes
And only 2.38% of Mahindra Finance's shareholders cast their postal ballots on a resolution to increase borrowing limits.
These abysmal numbers prompted the Ministry of Corporate Affairs last year to authorize depositories to facilitate electronic voting. This week, SEBI did the needful by mandating it for the top 500 listed companies by market capitalization.
Company Secretary, JSW Steel
"As far as we are concerned or my experience is concerned, during postal ballot, the response has been less than 3%. We have had several postal ballots but the response has been very poor. At least E voting might open up platform for urban shareholders who can just click a button from the convenience of their homes."
Executive VP, CDSL
"Shareholders are spread across the country and sometimes across the entire globe also. To make them participate in the workings of the company, what we thought was why shouldn't they be allowed to caste their vote electronically- they could do it from wherever they are situated and at any time they want."
Or at least that's the hope. Currently, CDSL and NSDL are permitted by SEBI to provide an E voting platform to companies and their investors. Shareholders with demat accounts get a one time password via email or post that allows them to vote via the depositary's website. These details can be used by the investor to vote on resolutions put forth by all the companies he's invested in. Once the vote is caste, it cannot be changed. Shareholders who hold shares in the physical form get a different log in id and password from each company they're invested in.
Company Secretary, JSW Steel
"As far as companies like ours is concerned, we have a large number of physical shareholders- out of 5 lakh shareholders, we have around 3 lakh holding in physical and 2 lakh shareholders in electronic form but even in these electronic form, large number of them do not have email ids registered because at that time it was not mandatory for them to open a demat account with email ids. So as far as we are concerned, we have to send requisite forms to a substantial number of these 5 lakh shareholders. But from the shareholders point of view, he has the choice to go either through the postal ballot or e voting process.
Executive VP, CDSL
"For FIIs or institutional investors who vote through their custodians, this is a big advantage. Most FIIs who have substantial shareholding in a company would want to vote for resolutions. But what they have to do today is give written instruction to the custodian, the ballot paper is signed by them. Custodian has to rush it to the company. Here what happens is the custodian, under his log in, can vote for all the resolutions for all the FIIs who are his client because the demat account is held by the custodian. So that is another advantage for the custodian that under one log in, he can vote for all the clients who have given him written instructions."
Though made mandatory by SEBI only this week, several corporates have already tested the E voting waters- the Jaypee group has facilitated electronic voting for its shareholders starting 2010. Since then, it has used the platform to put to vote approximately 20 resolutions involving investment in other companies, business diversification, enhanced borrowing limits, appointment of directors and raising funds
Company Secretary, Jaiprakash Power Ventures
"As far as numbers are concerned, I think, as against AGM where we around 1000-1500 persons personally present, in postal ballot, we get around 8000 votes. Out of this around, 500-600 are caste by electronic voting platform. It was about 6.5% in 2010, increased to about 7.5% in 2011 and the third process is already underway. Going forward, we expect it to increase it to 15-20% provided SEBI and MCA make investors aware of the desirability of e voting platform."
E-voting scores over the conventional postal ballot on several counts. It's faster and more transparent. Add to this the biggest plus of invalid votes getting eliminated in the process. The hope is that shareholder resolutions will see more investor participation and for companies, cost incurred on postal ballot will get reduced- a win-win situation for all!
In Mumbai, Payaswini Upadhyay