SEBI has in its Board meeting held on 28th September, 2021 tweaked some of the provisions of superior voting rights to make it more amenable and less bureacratic to techno centric promoters in start ups etc.
The Board decided to relax the eligibility requirements related to Superior Voting Rights (SR) Shares framework as follows:
Earlier, in 2019, SEBI had introduced superior voting rights (SR) framework specifically for issuer companies intensive in use of technology. The framework allows issuance of SR shares to promoters/ founders holding executive position in the company desirous of listing on the Main Board. The framework also has checks and balances such as coat tail provisions –i.e. matters in which SR shares shall have the same rights as that of ordinary shares and sunset clause i.e. time period until which such an SR shareholder shall enjoy superior voting rights.
i. As per the existing provisions, an SR shareholder should not be part of promoter group having net worth more than INR 500 crs. This has been changed to require that the SR shareholder, as an individual, should not have net-worth of more than INR 1000 crs.
ii. The minimum gap between issuance of SR shares and filing of Red Herring Prospectus is reduced to 3 months from the existing requirement of 6 months.