Swiggy on Wednesday defended its proposed amendments to its Articles of Association (AoA), saying the changes were intended to support its long-term goal of becoming an Indian Owned and Controlled Company (IOCC) and would not have resulted in concentration of founder control, after shareholders voted down the proposal last week.
The company said the special resolution seeking the amendments had received 72.36% shareholder approval, falling short of the 75% threshold required for passage by 2.64 percentage points. In a clarification filing to stock exchanges, Swiggy said it was engaging with shareholders to address concerns and achieve a positive outcome.
The food delivery and quick commerce platform said the proposed amendments were a preparatory step towards qualifying as an IOCC under Indian foreign exchange rules. It added that IOCC classification would additionally require resident Indian shareholding to exceed 50%, along with regulatory and shareholder approvals.
Swiggy said the company, which does not have an identifiable promoter group, required a governance structure that ensured founder and senior management representation at the board level for continuity in domestic management oversight and execution of strategy.
The company also sought to address concerns around governance and founder influence that had emerged following the vote. It said the additional rights proposed for Group CEO and co-founder Sriharsha Majety were limited to nominating one senior management professional to the board and did not amount to a general right to appoint any person. Similarly, rights proposed for co-founder Phani Kishan Addepalli would continue only if specified conditions related to economic interest and employment were met.
Swiggy said the proposed amendments would not have created veto powers, affirmative voting rights, committee nomination rights, quorum rights, permanent board seats or any right to appoint a majority of directors. The company added that the proposals had been vetted by the nomination and remuneration committee and approved by an independent board.