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I think I would be none too bold in asking to be informed of the real reason why I have been demoted, sir.

A more informal way to say it would be:

I don't think I am impolite at all if I ask you to let me know the reason for my demotion?

Is the first version polite?

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In terms of the level of politeness, they're both fine. Just structurally sound a bit awkward.

Consider this simpler version:

I hope it would not be rude of me if I inquire about the reason why I was demoted.

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    Even simpler: I hope it would not be rude to ask why I was demoted. – J.R. Nov 28 '17 at 15:15
  • Just stick with my answer or J.R.'s and you'll be fine. – Michael Rybkin Nov 28 '17 at 15:34
  • Either would be fine in writing; however, I'd avoid the use of inquire instead of ask in face-to-face conversation – I'm afraid it would sound stilted and that it could be taken as presumptuous, confrontational, or impolite. – J.R. Nov 28 '17 at 15:42
  • You definitely got a point there. – Michael Rybkin Nov 28 '17 at 15:49
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Politeness is a question of culture more than language, so it's difficult to answer without knowing where in the world you are and what kind of organisation you're working for. To me (native UK English speaker) both sound awkward and overly polite.

In both cases you're phrasing a question as a statement about that question, which makes it more difficult to understand.

You seem to assume that it might be rude to ask why you have been demoted, whereas I would expect to have a right to be informed of the reason for my demotion and would consider it very rude of my employer not to have already told me. I would certainly never call my employer sir, although I would call a customer sir.

I would probably just say

Would you mind telling me why I was demoted?

or

Could you please tell me why I was demoted?

but then I'm used to a pretty informal work culture. Your situation may be different.

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