Swiggy fails to secure requisite shareholder approval for altering AoA to become Indian-owned entity

Food delivery platform Swiggy has failed to secure the requisite shareholder approval to alter its Articles of Association, with which it had aimed to qualify as an Indian-owned and controlled company, according to an exchange filing.

In the exchange filing on Thursday, Swiggy stated that its resolution on the Amendment of Articles of Association received 72.36% votes of shareholders, falling short of the required threshold by 2.65%.

The company had conducted the postal ballot through a remote e-voting process, seeking approval of the shareholders for the alteration of the Articles of Association of the company and the Appointment of Renan De Castro Alves Pinto as a Non-Executive, Non-Independent Nominee Director.

The appointment, however, was duly passed by the members with a majority vote of 98.98%, the filing stated.

Reacting to the outcome of its special resolution, a Swiggy spokesperson said, "Swiggy acknowledges the outcome of the resolution, which received 72.35% shareholder approval, falling short of the required threshold by 2.65%."

The spokesperson further said, "The proposed amendment reflects our long-term commitment to ensuring management representation on the Board and advancing our transition toward becoming an Indian Owned and Controlled Company (IOCC) under applicable Indian foreign exchange laws and regulations. These remain enduring priorities for us."

The company will continue to engage constructively with its shareholders and work towards a positive outcome, the spokesperson added.

Swiggy had earlier clarified that proposed changes to its board nomination framework were part of a broader endeavour to eventually qualify as an "Indian Owned and Controlled Company" (IOCC) under the country's foreign exchange regulations, addressing queries raised by institutional investors over the amendments.

The clarification came amid institutional investors' requests for additional details on the rationale behind the proposed board changes.

"The company wishes to clarify that the Proposed Amendment also forms part of a broader endeavour by the company to become an Indian Owned and Controlled Company (IOCC) under applicable Indian foreign exchange laws and regulations, as and when the resident shareholding in the company increases beyond 50% with necessary regulatory and shareholder approvals," Swiggy said.

Under current FEMA rules, a company can qualify as Indian-owned and controlled only if both ownership and control rest with resident Indian citizens or eligible Indian entities, including through a board composition and nomination framework that supports domestic control over the board.