Dear All,
Find attached the Minutes of the SEBI Board Meeting dated 25th October 2010, wherein certain decisions have been taken by SEBI.
Apart from other decisions that have been taken by SEBI, a major amendment is proposed in the Preferential Issue Regulations. The decisions taken in this regard are reiterated below:
Preferential issue of equity shares or convertible securities or warrants to promoters and promoter group
In order to further tighten the preferential allotment framework, the Board decided that in case of preferential issues, where any promoter or any promoter group entity has previously subscribed to the warrants of the company but failed to exercise the warrants, the promoters and promoter group shall be ineligible for issue of equity shares or convertible securities or warrants for a period of one year from the date of expiry of the currency /cancellation of the warrants. The Board further decided that if any member of the promoters/ promoter group has sold shares in the previous six months, then the promoters/ promoter group would be ineligible for allotment on preferential basis.
On the basis of the plain reading of the above decision, a brief Synopsis of same is also attached herewith.
The decisions taken shall become effective, once they are notified and incorporated in the relevant Laws/ Regulations.
A detailed synopsis of all other decisions taken by SEBI will follow soon.
Team Corporate Professionals