26 February, 2016
The Securities and Exchange Board of India (SEBI) has amended the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, to provide an exit opportunity to dissenting shareholders (being at least 10% of the shareholders who voted in the general meeting), who have voted against a resolution for a change in objects or variation in terms of a contract, referred to in the prospectus.
Also, the amount to be utilized for the objects for which the prospectus was issued should be less than 75% of the amount raised (including the amount earmarked for general corporate purposes as disclosed in the offer document). Such an exit offer is to be made by the promoters or shareholders in control in control of an issuer making an offer of specified securities. To this end, SEBI has also amended the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2016, to exclude an acquisition of shares or voting rights of a company under the exit route to dissenting shareholders.
For further information, please contact:
Seema Jhingan, Partner, Lex Counsel Law Offices
sjhingan@lexcounsel.in
