SEBI with its notification dated 26th August' 2013 has made certain amendments in the chapter of Preferential Issue of SEBI (ICDR) Regulations. The regulations after the aforesaid amendment is read as under -
Regulation 73: Disclosure in case of Preferential Issue
Regulation 74: Allotment Pursuant to Special Regulations - Preferential Issue
Regulation 73: Disclosure in case of Preferential Issue
1.
The issuer shall, in addition to the disclosures
required under section 173 of the Companies Act, 1956 or any other
applicable law, disclose the following in the explanatory statement to
the notice for the general meeting proposed for passing special
resolution:
a.
the objects of the preferential issue;
b.
the proposal of the promoters, directors or key
management personnel of the issuer to subscribe to the offer;
c.
the shareholding pattern of the issuer before and
after the preferential issue;
d.
the time within which the preferential issue shall be
completed;
e. the identity of the natural persons who are the ultimate beneficial owners
of the shares proposed to be allotted and/or who ultimately control the proposed allottees, the percentage of post
preferential issue capital that may be held by them and change in
control, if any, in the issuer consequent to the preferential issue:
"Provided that if there is any listed company, mutual
fund, bank or insurance company in the chain of ownership of the proposed
allottee, no further disclosure will be necessary."
f.
an undertaking that the issuer
shall re-compute the price of the specified securities in terms of the
provision of these regulations where it is required to do so;
g.
an undertaking that if the amount payable on account
of the re-computation of price is not paid within the time stipulated in
these regulations, the specified securities shall continue to be locked-
in till the time such amount is paid by the allottees.
2.
The issuer shall place a copy of the certificate of
its statutory auditor before the general meeting of the shareholders,
considering the proposed preferential issue, certifying that the issue is being
made in accordance with the requirements of these regulations
3.
Where specified securities are issued on a
preferential basis to promoters, their relatives, associates and related
entities for consideration other than cash, the valuation of the assets
in consideration for which the equity shares are issued shall be done by
an independent qualified valuer, which shall be submitted to the
recognised stock exchanges where the equity shares of the issuer are
listed:
Provided that if the
recognised stock exchange is not satisfied with the appropriateness of
the valuation, it may get the valuation done by any other valuer and for
this purpose it may obtain any information, as deemed necessary, from the
issuer
4.
The special resolution shall specify the relevant date
on the basis of which price of the equity shares to be allotted on
conversion or exchange of convertible securities shall be calculated
Explanation: For the
purpose of sub-regulation (3), the term ‘valuer’ has the same meaning as
is assigned to it under clause (r) of sub-regulation (1) of regulation 2
of the Securities and Exchange Board of India (Issue of Sweat Equity)
Regulations, 2002.
Regulation 74: Allotment Pursuant to Special Regulations - Preferential Issue
1.
Allotment pursuant to the special resolution
shall be completed within a period of fifteen days from the date of passing of
such resolution:
Provided that where any application for exemption from the applicability
of the Securities and Exchange Board of India (Substantial Acquisition of
Shares and Takeovers) Regulations, 1997 or any approval or permission by any
regulatory authority or the Central Government for allotment is pending, the
period of fifteen days shall be counted from the date of order on such
application or the date of approval or permission, as the case may be:
Provided further that where the Board has granted relaxation to the
issuer in terms of Regulation 29A of SEBI (Substantial Acquisition of Shares
and Takeovers) Regulations, 1997, the preferential issue of equity shares and
compulsorily convertible debt instruments, whether fully or partly, shall be
made by it within such time as may be specified by the Board in its order
granting the relaxation:
Provided further that requirement of allotment within fifteen days
shall not apply to allotment of specified securities on preferential basis
pursuant to a scheme of corporate debt restructuring as per the corporate debt
restructuring framework specified by the Reserve Bank of India
2.
If the allotment of specified securities is
not completed within fifteen days from the date of special resolution, a fresh
special resolution shall be passed and the relevant date for determining the
price of specified securities under this Chapter will be taken with reference
to the date of latter special resolution.
3.
Notwithstanding anything contained in this
regulation, where a preferential allotment is made that attracts an obligation
to make an open offer for shares of the issuer under Securities and Exchange Board
of India (Substantial Acquisition of Shares and Takeovers) Regulation, 2011,
and there is no offer made under sub-regulation (1) of regulation 20 of the
Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulation, 2011, the period of fifteen days shall be counted from
the expiry of the period specified in sub-regulation (1) of regulation 20 or
date of receipt of all statutory approvals required for the completion of an
open offer under the Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulation, 2011:
Provided that if an offer is made under sub-regulation (1) of regulation
20 of the Securities and Exchange Board of India (Substantial Acquisition of
Shares and Takeovers) Regulation, 2011, the period of fifteen days shall be
counted from the expiry of the offer period as defined in the Securities and
Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulation, 2011:
Provided further that the provisions of this sub-regulation shall
not apply to an offer made under sub-regulation (1) of regulation 20 of the
Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulation, 2011, pursuant to a preferential allotment”
4. Allotment
shall only be made in dematerialised form
Explanation.-The requirement of
allotment in dematerialised form shall also be
applicable for the equity shares to be allotted pursuant to
exercise of option attached to warrant or conversion of convertible securities
Regulation
– 77: Payment of Considerations
1.
Full consideration of specified securities
other than warrants issued under this Chapter shall be paid by the allottees at
the time of allotment of such specified securities:
Provided that in case of a preferential issue of specified securities
pursuant to a scheme of corporate debt restructuring as per the corporate debt
restructuring framework specified by the Reserve Bank of India, the allottee
may pay the consideration in terms of such scheme.
2.
An amount equivalent to at least twenty five
per cent. of the consideration determined in terms of regulation 76 shall be
paid against each warrant on the date of allotment of warrants.
3.
The balance seventy five per cent. of the
consideration shall be paid at the time of allotment of equity shares pursuant
to exercise of option against each such warrant by the warrant holder.
4.
In case the warrant holder does not exercise
the option to take equity shares against any of the warrants held by him, the
consideration paid in respect of such warrant in terms of sub-regulation (2) shall
be forfeited by the issuer.
5. The issuer shall ensure that the consideration
of specified securities, if paid in cash, shall be received from respective
allottee's bank account
6.
The issuer
shall submit a certificate of the statutory auditor to the stock exchange where
the equity shares of the issuer are listed stating that the issuer is in
compliance of sub-regulation (5) and the relevant documents thereof are
maintained by the issuer as on the date of certification."
Regulation
– 78: Lock in of Specified Securities
1.
The specified securities allotted on
preferential basis to promoter or promoter group and the equity shares allotted
pursuant to exercise of options attached to warrants issued on preferential
basis to promoter or promoter group, shall be locked-in for a period of three
years from the date of trading approval
granted specified securities or equity shares allotted pursuant to exercise
of the option attached to warrant, as the case may be:
Provided that not more than twenty per
cent of the total capital of the issuer shall be locked-in for three years from
the date of trading approval:
Provided further that equity shares
allotted in excess of the twenty per cent shall be locked-in for one year from
the date of trading approval pursuant
to exercise of options or otherwise, as the case may be.
2.
The specified securities allotted on
preferential basis to persons other than promoter and promoter group and the
equity shares allotted pursuant to exercise of options attached to warrants
issued on preferential basis to such persons shall be locked in for a period of
one year from the date of trading
approval.
3.
The lock-in of equity shares allotted pursuant
to conversion of convertible securities other than warrants, issued on
preferential basis shall be reduced to the extent the convertible securities
have already been locked-in.
4.
The equity shares issued on preferential basis
pursuant to a scheme of corporate debt restructuring as per the Corporate Debt
Restructuring framework specified by the Reserve Bank of India shall be locked-in
for a period of one year from the date of trading
approval:
Provided that partly paid up equity shares, if any, shall be
locked-in from the date of trading
approval and the lock-in shall end on the expiry of one year from the date
when such equity shares become fully paid up.
5.
If the amount payable by the allottee, in case
of re-calculation of price under sub-regulation (3) of regulation 76 is not
paid till the expiry of lock-in period, the equity shares shall continue to be
locked in till such amount is paid by the allottee.
6.
The entire pre-trading approval shareholding of the allottees, if any, shall be
locked-in from the relevant date upto a period of six months from the date of
preferential allotment.
Explanation 1: For the
purpose of this regulation:
I) The expression “total capital of the issuer” means:
a. equity share capital issued by way of public issue or rights
issue including equity shares issued pursuant to conversion of specified
securities which are convertible; and
b. specified securities issued on a preferential basis to promoter
or promoter group.
II) (a) For the computation of twenty per cent. of the total
capital of the issuer, the amount of minimum promoters’ contribution held and
locked-in, in the past in terms of Securities and
Exchange Board of India (Disclosure and Investor Protection)
Guidelines, 2000 or these regulations shall be taken into account.
b) The minimum promoters’ contribution shall not again be put
under fresh lock-in, even though it is considered for computing the requirement
of twenty per cent. of the total capital of the issuer, in case the said
minimum promoters’ contribution is free of lock-in at the time of the
preferential issue
Explanation
2 - For the purposes of this regulation, the date of trading approval shall
mean the latest date when trading approval has been granted by all the
recognised stock exchanges where the equity shares of the issuer are listed,
for specified securities allotted as per the provisions of this Chapter
Regulation
– 79: Transferability of Locked in Specified Securities and warrants issued on
Preferential basis
(1) Subject to
the provisions of Securities and Exchange Board of India (Substantial
Acquisition of shares and Takeovers) Regulations, 1997, specified securities
held by promoters and locked-in in terms of sub-regulation (1) of regulation 78
may be transferred among promoters or promoter group or to a new promoter or
persons in control of the issuer:
Provided that lock-in on such
specified securities shall continue for the remaining period with the transferee
(2)
The
specified securities allotted on preferential basis shall not be transferred by
the allottee till trading approval is granted for such securities by all the
recognised stock exchanges where the equity shares of the issuer are listed
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