An order by the Securities Appellate Tribunal (SAT) in August last year has again stirred the hornet’s nest with respect to the powers of the regulatory bodies, and the resolution of areas of overlap. S. Kumars Nationwide, is a company listed on the Bombay Stock Exchange (BSE), and engaged in the business of buying selling, manufacturing and marketing of textile products. In a bid to repay loans...
Death Warrant for Share Warrants
The recent set of amendments effected by the Securities and Exchange Board of India to the SEBI (Disclosure and Investor Protection) Guidelines, 2000 (“DIP Guidelines”) in terms of a circular dated August 28, 2008 (“SEBI Circular”) contains an unexpected surprise. The SEBI Circular 2(vi) states:- “Presently, as per the guidelines on preferential allotment, warrants issued on preferential basis...
Simplifying Qualified Institutional Placements and Rights Issues
(In the following post, Shantanu Naravane examines recent changes to the SEBI DIP Guidelines made with a view to promoting qualified institutional placements and rights issues) The concept of Qualified Institutional Placements [“QIP”] was introduced in India, with effect from May 8, 2006, by virtue of an amendment to the SEBI (Disclosure & Investor Protection [“DIP”] Guidelines, 2000...
SEBI Pricing Norms & Private Equity
When the market prices of companies in India are lower than what they were a few months ago, they would obviously be attractive to private equity funds and similar investors. However, the SEBI minimum pricing norms as set out in Chapter XIII of the SEBI (Disclosure & Investor Protection) Guidelines, 2000 are hampering deals in these market conditions, as this report by INDIA PE suggests. The...
Preposterous policy view from SEBI on QIPs and Public Shareholding
The Securities and Exchange Board of India has issued an informal guidance relating to the Listing Agreement and the SEBI (Disclosure and Investor Protection) Guidelines (“DIP Guidelines“) that defies all logic and reason. Clause 13.A.1.1(b) of the DIP Guidelines, which governs private placements to qualified institutional buyers, provides that a listed company ought to be in...
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