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Swiggy on Wednesday clarified that proposed changes to its board nomination framework are 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.
In a regulatory filing, the food delivery platform, which also owns quick commerce brand Instamart, said institutional investors sought additional details on the rationale behind the proposed board changes.
Swiggy said the proposed amendments are aimed at "rationalising legacy nomination rights" while ensuring management continuity and board-level representation for executives driving the company's strategic plans.
"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.
Swiggy said its current structure lacks an identifiable promoter group with a substantial stake or dominant board representation that could independently serve as a safeguard for domestic control.
The company considers it important to put in place an appropriate governance architecture that supports its endeavour to become an IOCC through a domestically controlled board and majority domestic shareholding, it said.
"The proposed amendments do not, by themselves, result in the company being classified as an IOCC," Swiggy said in the filing, adding that further shareholder approvals and corporate actions will be required to complete the process.
In a regulatory filing, the food delivery platform, which also owns quick commerce brand Instamart, said institutional investors sought additional details on the rationale behind the proposed board changes.
Swiggy said the proposed amendments are aimed at "rationalising legacy nomination rights" while ensuring management continuity and board-level representation for executives driving the company's strategic plans.
"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.
Swiggy said its current structure lacks an identifiable promoter group with a substantial stake or dominant board representation that could independently serve as a safeguard for domestic control.
The company considers it important to put in place an appropriate governance architecture that supports its endeavour to become an IOCC through a domestically controlled board and majority domestic shareholding, it said.
"The proposed amendments do not, by themselves, result in the company being classified as an IOCC," Swiggy said in the filing, adding that further shareholder approvals and corporate actions will be required to complete the process.
