Foreign shareholder not promoter; Rule 9A puts demat duty on investor, rights issue and reclassification upheld

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....NCLAT held that Respondent-foreign shareholder was not a "promoter" on the date of the rights issue, as it neither exercised control nor held majority shareholding nor had board representation, and had been validly reclassified as "public shareholder/other than promoter" by board resolution prior to the issue. NCLAT clarified that promoter reclassification is permissible for unlisted public companies and SEBI circulars for listed entities are inapplicable. Under Rule 9A, the obligation to hold securities in dematerialised form before subscribing rested on the shareholder; the Appellant's duty was limited to facilitating dematerialisation, which Respondent never sought. Rejection of Respondent's application and continuation of the rights iss.........