Tag: Preferential Allotment
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Informal Guidance on Preferential Allotment
SEBI has issued an informal guidance to Strides Arcolabs in connection with the company’s eligibility to issue securities to its promoters on a preferential allotment basis. The information guidance essentially pertains to the interpretation of Reg. 72(2) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (ICDR), which reads as follows: The issuer
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Preferential Allotment of Securities in Unlisted Companies
The Ministry of Corporate Affairs (MCA) has announced draft rules that will, when promulgated, substitute the Unlisted Public Companies (Preferential Allotment) Rules, 2003. This will make the process of issue of securities more stringent for unlisted public companies. The Indian Legal Space blog has a nice comparison of the existing rules and the proposed changes.
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Public Company shares cannot be fettered at all, says Bombay HC
The Bombay High Court has ruled that any pre-emptive rights over shares in public limited companies are patently illegal in view of the principle of “free transferability” enshrined in Section 111A of the Companies Act, 1956 (“the Act”). This revives the debate on enforceability of shareholder agreements and joint venture agreements governing public limited companies.
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Warrants and Voting
My friend Jayant Thakur posted a critique on July 31 on the recent SEBI Order in the case preferential allotment of warrants to promoters. Umakanth dealt with the element of potential prohibition of voting in areas of conflict of interest on August 1. Here is a piece I wrote in the Business Standard today, with
