Infy seeks shareholders' nod for new Articles of Association
New Delhi: Infosys has sought shareholders' approval to adopt a new Articles of Association (AoA), bringing in provisions for buyback of shares and appointment of independent directors.
"The Board has recommended the adoption of new Articles of Association of the company in conformity with the Companies Act, 2013 to the shareholders for approval," Infosys said in a BSE filing.
According to the new Articles of Association (AoA), Infosys "may purchase its own equity shares or other securities by way of a buy-back arrangement." Infosys, which has liquid assets worth Rs 35,697 crore (about USD 5.25 billion) on its books, has been under pressure from investors to utilise the amount either through share buyback or a generous dividend.
The pressure has grown further after its industry peers Cognizant and Tata Consultancy Services announced their buyback offers worth USD 3.4 billion (about Rs 22,652 crore) and Rs 16,000 crore, respectively.
While there have been reports that Infosys may consider a Rs 12,000 crore share buyback, the company has maintained that it will take a decision at an "appropriate time". Besides, Infosys has inserted provisions related to issuance and allotment of convertible preference shares, cumulative preference shares and redeemable preference shares in the new AoA.
While Article 13 relating to power of the Board to issue shares at a discount has been deleted from the new AoA, provisions relating to nomination facility for shares by a shareholder have been inserted. "An express provision has been made on the appointment of independent directors to be made on terms in accordance with the applicable law have been inserted," the company said.
The provisions also said the company may appoint 15 directors and any increase beyond such limit will require special resolution in line with the Companies Act, 2013.