In a bid to boost sagging market sentiment, the government today decided to allow companies to buy back up to 10 per cent of their shares without having to seek the approval of shareholders.
Under the new rules, companies can issue fresh shares after six months of the buyback as against the previous limit of 24 months.
The ordinance seeks to amend Section 77 A of the Companies Act 1956 for this purpose. Previously, as per Section 77 A (2b), a company was authorised to buy back shares only after a special resolution was passed in its general meeting.
The new norms make a special resolution mandatory only if the buyback is over 10 per cent of the company
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