Fresh Election of Directors on request of substantial acquirer

Q. Briefly describe the relevant provisions of the Companies Ordinance, 1984 whereby a person carrying substantial voting shares in a listed company may apply for fresh election of directors.

Ans: Fresh Election of Directors on request of substantial acquirer:

A person acquiring 12.5% of more voting shares in a listed company in his own name, may apply to the commission for requiring the company to hold fresh election of directors in accordance with the procedure laid down in the section 178 in the forthcoming annual general meeting of the company.

The commission may, if it deems appropriate in the interest of the company, its minority shareholders or the capital markets generally, direct the company to hold the election of directors.

The person who requests fresh election of directors is held shall not sell or otherwise disposed of the shares acquired by him for at least one year from the date of election of directors.