MUMBAI: Ashalata Maheshwari has been attending annual general meetings of companies as an investor for over six decades and is known for her ‘shayaris’. But this year, for the first time in her life, the octogenarian may have to recite her shayaris on webcam as many large companies plan to hold their AGMs through videoconferencing.

“I’ll have to learn computer now… I’ll tell my daughter to teach me,” said the veteran investor, not quite sure if she will be able to deliver her verses well. Maheshwari hopes online AGMs – a provision the government has allowed companies this year in view of the raging Covid-19 pandemic and the need to restrict gatherings – will be just a one-year affair. But many other stock market investors think otherwise.

They don’t see the yearly corporate jamboree – where investors heckle for biryanis, cold drinks and more dividends in the same breath and managements try hard to dodge sharp questions on their operation matrices – ever making a comeback.

And it’s not just an opportunity to meet top management of their investee companies that savvy small shareholders will miss. Many believe online AGMs, or e-AGMs, will take the “sting” away from shareholder meets.

“This (AGM) is the only time when the shareholders get an opportunity to interact with top management,” said Arun Goenka, a prominent stock investor. “That opportunity will be lost.”

Online AGMs would make it easier for managements to block out “uneasy” questions on the company’s operation matrices, some investors said.

Dissenting shareholders may not even be given a chance to speak, they alleged.

“Small minority shareholders – who fill up the cap tables of companies – could have their main platform to voice themselves get diluted in online medium,” said ace equities investor Janak Mathuradas.

Proxy advisory firms, who advise institutional investors on corporate matters, are skeptical about the impartial conduct of online AGMs.

“Even in physical AGMs, companies tend to block out dissenting shareholders by peppering the AGM audience with shareholders who ask soft questions and sing paeans,” said Shriram Subramanian, managing director of proxy advisory firm InGovern. Blocking out dissent in online AGMs will be easier as companies can cite connectivity issues if someone raises prickly matters, he added.

Another section, however, feel that as an idea, online AGMs may not be all that bad. It will cut down travel time for investors and save a lot of hassle of organising physical AGMs for companies, they said.

“The substance of AGMs will be better online,” said Vinod Dadlani, an investor. “Half the people (investors) who come to these AGMs are there for gifts and shayaris…most of the time you really have to struggle to ask a serious technical question as there are some people busy singing paeans…online AGMs should continue,” he opined.

The futility of holding large AGMs is perhaps in the minds of some top industrialists, too.

“Time has come for having virtual AGMs,” said Harsh Goenka, chairman of RPG Enterprises. “What is achieved in an AGM with a large physical gathering of people can very well be achieved virtually.”

Companies with maximum number of shareholders

Company No. of Shareholders
Reliance Power 3096881
Reliance Industries 2632168
State Bank of India 2446100
Yes Bank 2044109
SBI Cards & Payment Services 1961808
Tata Motors 1354298
Reliance Communications 1322971
ITC 1302214
HDFC Bank 1286083
Larsen & Toubro 1251567

Source : Capitaline / Compiled by : ETIG


Meanwhile, large companies with hundreds of thousands of shareholders such as Tata Consultancy Services and Wipro are busy devising e-AGM protocol for the smooth conduct of the shareholder meetings.

Sanaulla Khan, vice president and company secretary at Wipro, said the software major will conduct the AGM through videoconference where “shareholders can easily participate in the meeting”. “We are still evaluating various options to give the best possible experience to the shareholders,” he said. “We will take an appropriate decision closer to the meeting date.”

Last week, TCS had issued a notice to its shareholders for holding its first virtual AGM on June 11.

Other large companies are weighing the available options based on regulatory advice.

A spokesperson of Reliance Industries, which usually hosts 1,000-1,500 shareholders at its AGMs, said, “We will have to work on the modalities depending on the regulatory guidance.”

A Tata Steel spokesperson said the company is looking at various options and a “decision will be taken closer to the date” of the AGM.

State Bank of India is discussing the options and a decision is likely this week, according to an SBI source.

The corporate affairs ministry had last month allowed companies to hold their AGMs and extraordinary general meetings (EGMs) through videoconference or other audio visual means due to Covid-19 outbreak.

As per the Companies Act, 2013, companies must hold AGM within six months from the closure of the previous financial year and not beyond 15 month of the last AGM.


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