The Insolvency and Bankruptcy Board of India ("IBBI") had notified the IBBI (Information Utilities) Regulations, 2017 on March 31, 2017. These regulations provided that ordinarily a person should not hold more than 10% of paid up equity share capital or voting power of an information utility, while allowing certain specified persons to hold up to 25%. These further provided that a person may hold up to 51% of paid-up equity share capital or total voting power of an information utility till the expiry of three years from its registration.
IBBI has now amended the IBBI (Information Utilities) Regulations, 2017 on September 29, 2017. According to the amended regulations, a person may, directly or indirectly, either by itself or together with persons acting in concert, hold up to 51% of the paid-up equity share capital or total voting power of an information utility up to three years from the date of its registration. Further, an Indian company, (i) which is listed on a Stock Exchange in India, or (ii) where no individual, directly or indirectly, either by himself or together with persons acting in concert, holds more than 10% of the paid-up equity share capital, may hold up to 100% of the paid-up equity share capital or total voting power of an information utility up to three years from the date of its registration. However, these amended provisions are to be available in respect of information utilities registered before September 30, 2018. The amendment requires that more than half of the directors of an information utility shall be Indian nationals and residents in India. The amendments are effective from September 29, 2017.
This update is authored by Clasis Law, Clyde & Co's associated firm in India
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