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(BUY BACK OF SECURITIES) REGULATIONS, 1998
CONTENTS 1. Short title and commencementCHAPTER II: CONDITIONS OF BUY-BACK 3. ApplicabilityCHAPTER III: BUY-BACK THROUGH TENDER OFFER 6. Buy-back from existing security holdersCHAPTER IV: BUY-BACK FROM THE OPEN MARKET 14. Buy-back from open marketCHAPTER V: GENERAL OBLIGATIONS 19. Obligations of the CompanyCHAPTER VI: PENALTIES AND PROCEDURE 22. Power of the Board to order investigationCHAPTER VII: MISCELLANEOUS 26. Power of the Board to remove the difficultiesSCHEDULE I: CONTENTS OF EXPLANATORY STATEMENT SCHEDULE II: CONTENTS OF THE PUBLIC ANNOUNCEMENT SCHEDULE III: DISCLOSURES TO BE MADE IN THE LETTER OF OFFER SCHEDULE IV: FEES
SECURITIES AND EXCHANGE
BOARD OF INDIA
S.O.No 975 (E)
In exercise of the powers conferred by sub-sections (1) and (2) of section
11 and section 30 of the Securities and Exchange Board of India Act, 1992
(15 of 1992) read with clause (f) of sub-section (2) of Section 77A of
the Companies Act, 1956 (1 of 1956) as inserted by 1*[
the Companies (Amendment) Act 1999 (21 of 1999)], the Board, hereby, makes
the following regulations, namely: -
1. (a) These regulations shall be called the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998. (b) These regulations shall come into force on the date of their publication in the Official Gazette.Definitions 2 (1) In these regulations, unless the context otherwise requires: - (a) �Act� means the Securities and Exchange Board of India Act, 1992 (15 of 1992);2. All other expressions unless defined herein shall have the same meaning as have been assigned to them under the Act or the Securities Contracts (Regulation) Act, 1956 or the Companies Act, 1956, or any statutory modification or re-enactment thereof, as the case may be. Foot notes 1. Substituted for "the Companies (Amendment) Ordinance, 1998 (19 of 1998)" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 2. Subsituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 3. Subsituted for "the Companies (Amendment) Ordinance, 1998 (19 of 1998)" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 4. Subsituted for "the Companies (Amendment) Ordinance, 1998 (19 of 1998)" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 5.
Subsituted for "shares" by the SEBI (Buy-back of Securities)
(Amendment) Regulations, 1999 published in the Official Gazette of India
dated 21.09.1999
3. These regulations
shall be applicable to buy-back of equity shares of a company listed on
a stock exchange.
Company may buy back its own 6*[specified securities] 4. (1) A company may buy-back its 6*[specified securities] by any one of the following methods: - (a) from the existing 7*[securities holders] on a proportionate basis through the tender offer;(2) A company shall not buy back its 8*[specified securities] from any person through negotiated deals, whether on or of the stock exchange or through spot transactions or through any private arrangement. (3) Any person or an insider shall not deal in securities of the company on the basis of unpublished information relating to buy-back of 9*[specified securities] of the company. 5 (1) For the purposes of passing a special resolution under sub-section (2) of section 77A of the Companies Act, the explanatory statement to be annexed to the notice for the general meeting pursuant to section 173 of the Companies Act shall contain disclosures as specified in schedule I. A copy of the resolution passed at the general meeting under sub-section (2) A copy of the resolution passed at the General meeting under sub - section (2) of section 77A of the Companies Act, shall be filed with the Board and the stock exchanges where the 10*[specified securities] of the company are listed, within seven days from the date of passing of the resolution. 11*[Board resolution 5A (1) A company, authorised by a resolution passed by the Board of Directors at its meeting to buy back its securities under first proviso to clause (b) of sub-section (2) of section 77A of the Companies Act, 1965 as inserted by the Companies (Amendment) Act, 2001, may buy back its securities subject to the following conditions: (a) before making a public announcement under sub-regulation (1) of regulation 8 a public notice shall be given in at least one English national daily, one Hindi national daily and a regional language daily, all with wide circulation at the place where the registered office of the company is situated;(2) A copy of the resolution, passed by the Board of Directors at its meeting authorising buy back of its securities, shall be filed with the Board and the stock exchanges, where the securities of the company are listed, within two days of the date of the passing of the resolution.] Foot notes 6. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 7. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 8. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 9. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 10. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 11.
Regulation 5A inserted by the SEBI (Buy-back of Securities)
(Amendment) Regulations, 1999 published in the Official Gazette of India
dated 28.11.2001
Buy-back from existing 12*[security holders] 6. A company may buy-back its 13*[specified securities] from its existing 12*[security holders] on a proportionate basis in accordance with the provisions of this Chapter. 7. The explanatory statement annexed to the notice under section 173 of the Companies Act 14*[or the public notice under sub-regulations 5A] shall contain the disclosures mentioned in regulation 15*[or regulation 5A] and also the following disclosures; - (a) The 16*[maximum] price at which the buy-back of 17*[specified securities] shall be made 18*[and whether the Board of Directors of the company are being authorised at the general meeting to determine subsequently the specific price at which the buy-back may be made at the appropriate time];Filing of offer document, etc. 8. (1) The company which has been authorised by a special resolution 20*[or a resolution passed by the Board of Directors at its meeting] shall before buy back of 21*[specified securities] make a public announcement in at least one English National Daily, one Hindi National Daily and a Regional language daily all with wide circulation at the place where the Registered office of the company is situated and shall contain all the material information as specified in schedule II. (2) The public announcement shall specify a date, which shall be the `specified date� for the purpose of determining the names of the 22*[security holders] to whom the letter of offer shall be sent. (3) The specified date shall not be earlier than thirty days and not later than forty-two days from the date of the public announcement. (4) The Company shall within seven working days of the public announcement shall file with the Board a draft-letter of offer containing disclosures as specified in schedule III through a merchant banker who is not associated with the company. (5) The draft letter of offer referred to in sub regulation (4) shall be accompanied with fees specified in schedule IV. (6) The letter of offer shall be dispatched not earlier than twenty-one days from its submission to the Board under sub-regulation (4). Provided that if, within twenty-one days from the date of submission of the draft letter of offer, the Board specifies modifications, if any, in the draft letter of offer, (without being under any obligation to do so) the merchant banker and the company shall carry out such modifications before the letter of offer is dispatched to the 23*[security holders]. (7) The company shall file along with the draft letter of offer, a declaration of solvency in the prescribed form and in a manner prescribed in sub-section (6) of section 77A of the Companies Act. 9 (1). The offer for buy back shall remain open to the members for a period not less than fifteen days and not exceeding thirty days. (2) The date of the opening of the offer shall not be earlier than seven days or later than thirty days after the specified date. (3) The letter of offer shall be sent to the 24*[security holders] so as to reach the 24*[security holders] before the opening of the offer. (4) In case the number of 25*[specified securities] offered by the 26*[security holders] is more than the total number of 25*[specified securities] to be bought back by the company, the acceptances per 26*[security holder] shall be equal to the acceptances tendered by the 26*[security holders] divided by the total acceptances received and multiplied by the total number of 25*[specified securities] to be bought back. (5) The company shall complete the verifications of the offers received within fifteen days of the closure of the offer and the 27*[specified securities] lodged shall be deemed to be accepted unless a communication of rejection is made within fifteen days from the closure of the offer. 10 (1) The company shall as and by way of security for performance of its obligations under the regulations, on or before the opening of the offer deposit in an escrow account such sum as specified in sub-regulation (2). (2) The escrow amount shall be payable in the following manner,- (i) If the consideration payable does not exceed Rs.100 crores - 25% of the consideration payable;(3) The escrow account referred in sub-regulation (1) shall consist of (a) cash deposited with a scheduled commercial bank or;(4) Where the escrow account consists of deposit with a scheduled commercial bank, the company shall, while opening the account, empower the merchant banker to instruct the bank to issue a banker�s cheque or demand draft for the amount lying to the credit of the escrow account, as provided in the regulations. (5) Where the escrow account consists of bank guarantee, such bank guarantee shall be in favour of the merchant banker and shall be valid until thirty days after the closure of the offer. (6) The company shall, in case the escrow account consists of securities, empower the merchant banker to realise the value of such escrow account by sale or otherwise and if there is any deficit on realisation of the value of the securities, the merchant banker shall be liable to make good any such deficit. (7) In case the escrow account consists of bank guarantee or approved securities, these shall not be returned by the merchant banker till completion of all obligations under the regulations. (8) Where the escrow account consists of bank guarantee or deposit of approved securities, the company shall also deposit with the bank in cash a sum of at least one-percent of the total consideration payable, as and by way of security for fulfilment of the obligations under the regulations by the company. (9) On payment of consideration to all the 28*[security holders] who have accepted the offer and after completion of all formalities of buy back, the amount, guarantee and securities in the escrow, if any, shall be released to the company. (10) The Board in the interest of the 29*[security holders] may in case of non-fulfilment of obligations under the regulations by the company forfeit the escrow account either in full or in part. (11) The amount forfeited under sub-regulation (10) may be distributed pro rata amongst the 30*[security holders] who accepted the offer and balance, if any, shall be utilised for investor protection. Payment to 31*[security holders] 11. (1) The company shall immediately after the date of closure of the offer open a special account with a bankers to an issue registered with the Board and deposit therein, such sum as would, together with the amount lying in the escrow account make-up the entire sum due and payable as consideration for buy-back in terms of these regulations and for this purpose, may transfer the funds from the escrow account. (2) The company shall within seven days of the time specified in sub-regulation (5) of regulation 9 make payment of consideration in cash to those 32*[security holders] whose offer has been accepted or return the 33*[security certificates] to the 32*[security holders]. 12. (1) The company shall extinguish and physically destroy the 34*[security certificates] so bought back in the presence of a Registrar or the Merchant Banker, and the Statutory Auditor within seven days from the date of acceptance of the 35*[specified securities]. (2) The 36*[specified securities] offered for buy-back if already dematerialised shall be extinguished and destroyed in the manner specified under Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 and the bye-laws framed thereunder. (3) The company shall furnish a certificate to the Board duly verified by (a) the registrar and whenever there is no registrar through the merchant banker;(4) The particulars of the 37*[security certificates] extinguished and destroyed under sub-regulation (1) shall be furnished to the stock exchanges where the shares of the company are listed within seven days of extinguishment and destruction of the certificates. (5) The company shall maintain a record of 38*[security certificates], which have been cancelled and destroyed as prescribed in sub-section (9) of section 77A of the Companies Act. 13. The provisions pertaining
to buy back through tender offer as specified in this Chapter shall be
applicable mutatis mutandis to odd lot 39*[specified
securities].
12. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 13. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 14. "or the public notice under sub-regulation 5A"inserted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 28.11.2001 15. "or sub-regulations 5A" inserted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 28.11.2001 16. "maximum" inserted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.99 17. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 18. "and whether the Board of Directors of the company are being authorised at the general meeting to determine subsequently the specific price at which the buy-back may be made at the appropriate time"inserted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 19. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 20. "or a resolution passed by the Board of Directors at its meeting"inserted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 2001 published in the Official Gazette of India dated 28.11.2001 21. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.99 22. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 23. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 24. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 25. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 26. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 27. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 28. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 29. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 30. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 31. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 32. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 33. Substituted for "share certificates" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 34. Substituted for "share certificates" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 35. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 36. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 37. Substituted for "share certificates" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 38. Substituted for "share certificates" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 39.
Substituted for "shares" by the SEBI (Buy-back of Securities)
(Amendment) Regulations, 1999 published in the Official Gazette of India
dated 21.09.1999
14 (1). A company intending to buy-back its 40*[specified securities] from the open market shall do so in accordance with the provisions of this Chapter. (2) The buy-back of 41*[specified securities] from the open market may be in any one of the following methods: (a) through stock exchangeBuy Back through stock exchange 15. A company shall buy-back its 42*[specified securities] through the stock exchange as provided hereunder; (a) The special resolution referred to in regulation 5 43*[or the resolution passed by the Board of Directors at its meeting as referred to in regulation 5A] shall specify the maximum price at which the buy-back shall be made;Extinguishment of certificates 16 (1). Subject to the provisions of sub-regulations (2), the provisions of regulation 12 pertaining to extinguishment of certificates shall be applicable mutatis mutandis. (2) The company shall complete the verification of acceptances within fifteen days of the pay-out. Buy-back through book building 17 (1) A company may buy-back its 48*[specified securities] through the book-building process as provided hereunder: (a) The special resolution referred to in regulation 5 49*[or the resolution passed by the Board of Directors at its meeting as referred to in regulation 5A] shall specify the maximum price at which the buy-back shall be made. (ii) The amount to be deposited in the escrow account shall be determined with reference to the maximum price as specified in public announcement.
(f) The public announcement shall also contain the detailed methodology of the book-building process, the manner of acceptance, the format of acceptance to be sent by the 50*[security holders] pursuant to the public announcement and the details of bidding centres. (g) The book building process shall be made through an electronically linked transparent facility. (h) The number of bidding centres shall not be less than thirty and there shall be at least one electronically linked computer terminal at all the bidding centres. (i) The offer for buy back shall remain open to the 51*[security holders] for a period not less than fifteen days and not exceeding thirty days. (j) The merchant banker and the company shall determine the buy-back price based on the acceptances received. (k) The final buy-back price, which shall be the highest price accepted shall be paid to all holders whose 52*[specified securities] have been accepted for buy-back. Extinguishment of Certificates 18. The provisions of
regulation
12 pertaining to extinguishment of certificates shall be applicable
mutatis mutandis.
38. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 39. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 40. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 41. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 42. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 43. "or the resolution passed by the Board of Directors at its Meeting as referred to in regulation 5A" inserted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 44. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 45. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 46. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 47. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 48. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 49. "or a resolution passed by the Board of Directors at its meeting"inserted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 50. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 51. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 52. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999
19. (1) The company shall ensure that, - (a) the letter of offer, the public announcement of the offer or any other advertisement, circular, brochure, publicity material 53*[or public notice referred to in clause (a) of sub-regulation (1) of regulation 5A] shall contain true, factual and material information and shall not contain any misleading information and must state that the directors of the company accepts the responsibility for the information contained in such documents;(2) No public announcement of buy back shall be made during the pendency of any scheme of amalgamation or compromise or arrangement pursuant to the provisions of the Companies Act. (3) The company shall nominate a compliance officer and investors service centre for compliance with the buy-back regulations and to redress the grievances of the investors. (4) The particulars of the 56*[securitiy certificates] extinguished and destroyed shall be furnished by the company to the stock exchanges where the 57*[specified securities] of the company are listed within seven days of extinguishment and destruction of the certificates. (5) The company shall not buy-back the locked-in 58*[specified securities] and non-transferable 58*[specified securities] till the pendency of the lock-in or till the 58*[specified securities] become transferable. (6) 59*[****} Provided that the capital buy back reserve account may be applied by the company in paying up un-issued shares of the company to be issued to members of the company as fully paid bonus shares. (7) The company shall within two days of the completion of buy-back issue an public advertisement in a national daily, inter alia, disclosing: (i) number of 60*[specified securities] bought;(8) The company in addition to these regulations shall comply with the provisions of buy-back as contained in the Companies Act and other applicable laws. Obligations of the Merchant Banker 20. The merchant banker shall ensure that - (a) the company is able to implement the offer;Action against intermediaries 21. (1) The Board may, on failure of the merchant banker to comply with the obligations or failing to observe due diligence initiate action against the merchant banker in terms of Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992. (2) The Board may on
the failure of a registrar or a broker to comply with the provisions of
these regulations or failing to observe due diligence initiate action against
the registrar or the broker in terms of the regulations applicable to such
intermediaries.
53. "or public notice referred to in clause (a) of sub-regulation (1) of regulation 5A" inserted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 54. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 55. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 56. Substituted for "share certificates" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 57. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 58. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 59. Following sub-regulation (6) of regulation 19 omitted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 "Where the shares have been bought back otherwise than out of the proceeds of an earlier issue other than a fresh issue of shares made specifically for the purpose of buy back then a sum equal to the nominal value of shares bought back out of free reserves shall be transferred to reserve account to be called the capital buy-back reserve account."60. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 61. Substituted for "shareholders" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999
Power of the Board to order investigation 22. (1) The Board may, suo-motu or upon information received by it, cause an investigation to be made in respect of the conduct and affairs of any person associated with the process of buy back, by appointing an officer of the Board. Provided that no such investigation shall be made except for the purposes specified in sub-regulation (2). (2) The purposes referred to in sub-regulation (1) are the following, namely: - (a) to ascertain whether there are any circumstances which would render anyperson guilty of having contravened any of these regulations or any directions issued thereunder;(3) An order passed under the sub-regulation (1) shall be sufficient authority for the Investigating Officer to undertake the investigation and on production of an authenticated copy of the order, the person concerned shall be bound to carry out the duty imposed in regulation 23. 23. (1) It shall be the duty of every person in respect of whom an investigation has been ordered under regulation 22, to produce before the Investigating Officer such book, accounts and other documents in his custody or control and furnish him with such statements and information as the said officer may require from the purposes of the investigation. (2) Without prejudice to the generality of the provisions of sub-regulation (1), such person shall - (a) Extend to the Investigating Officer reasonable facilities for examining any books, accounts and other documents in his custody or control (whether kept manually or in computer or in any other form) reasonably required for the purposes of the investigation;(3) The Investigating Officer shall for the purpose of investigation, have the full powers; (a) Of summoning and enforcing the attendance of persons;Submission of Report to the Board 24 (1). The Investigating Officer shall, on completion of the investigation, after taking into account all relevant facts and circumstances, submit a report to the Board. (2) On the receipt of report under sub-regulation (1), the Board may initiate such action as may be empowered to do so in the interests of investors and the securities market. Power of the Board to issue directions 25 (1). The Board may in the interests of the securities market and without prejudice to its right to initiate action including criminal prosecution by the Board under section 24 of the Act and give such directions as it deems fit including: (a) Directing the person concerned not to further deal in securities in any particular manner;(2) In case any person is guilty of insider trading or market manipulation the person concerned shall be dealt with in accordance with the provisions of Securities and Exchange Board of India (Insider Trading) Regulations, 1992 and Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to the Securities Market) Regulations, 1995. Foot notes 62. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999
Power of the Board to remove the difficulties 26. In order to remove any difficulties in the interpretation or application of the provisions of these Regulations, the Board shall have the power to issue directions through guidance notes or circulars. Provided that where
any direction is issued by the Board in a specific case relating to interpretation
or application of any provision of these Regulations, it shall be done
only after affording a reasonable opportunity to the concerned parties
and after recording reasons for the direction.
SCHEDULE
I
The Explanatory statement to the notice for special resolution for buy back shall, inter-alia, contain the following: i. the date of the Board meeting at which the proposal for buy back was approved by the Board of Directors of the company; ii. the necessity for the buy back; iii.64*[the company any specify in the esplanatoy statement to the notice that the shareholders at the general meeting may authorise the Board of Directors of the company to adopt one of the methods referred in sub-regulation (1) of regulation 4 at the appropriate time] iv. the maximum amount required under the buy back and the sources of funds from which the buy back would be financed. v. the basis of arriving at the buy-back price. vi. the number of securities that the company proposes to buy back. vii. (a) the aggregate shareholding of the promoter and of the directors of the promoters, where the promoter is a company and of persons who are in control of the company as on the date of the notice convening the General Meeting 65*[or the Meeting of the Board of Directors]. (b) aggregate number of equity shares purchased or sold by persons including persons mentioned in (a) above during a period of six months preceding the date of the Board Meeting at which the buy back was approved from date till the date of notice convening the general meeting.viii. intention of the promoters and persons in control of the company to tender 66*[specified securities] for buy-back indicating the number of 66*[specified securities], details of acquisition with dates and price. ix. a confirmation that there are no defaults subsisting in repayment of deposits, redemption of debentures or preference shares or repayment of term loans to any financial institutions or banks. x. a confirmation that the Board of Directors has made a full enquiry into the affairs and prospects of the company and that they have formed the opinion- (a) that immediately following the date on which the General Meeting 67*[or the meeting of the Board of Directors] is convened there will be no grounds on which the company could be found unable to pay its debts;xi. a report addressed to the Board of Directors by the company�s auditors stating that- (i) they have inquired into the company�s state of affairs; Foot notes 63. "and regulation 5A" inserted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 2001 published in the Official Gazette of India dated 28.11.2001 64. Substituted for "the method to be adopted for the buy back" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 65. "or the Meeting of the Board of Direcotrs" inserted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 66. Substituted for "shares" by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999 67. "or the Meeting of the Board of Direcotrs" inserted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999
SCHEDULE
II
The public announcement shall, inter-alia, contain the following: 1. Details of the offer including the total number and percentage of the total paid up capital and free reserves proposed to be bought back and price. 2. The proposed time table from opening of the offer till the extinguishment of the certificates. 3. The Specified date. 4. Authority for the offer of buy back. 5. A full and complete disclosure of all material facts including the contents of the explanatory statement annexed to the notice for the general meeting at which the special resolution approving the buy back was passed 68*[or the contents of public notice issued after the passing of the resolution by the Board of Directors authorising the buy-back]. 6. The necessity for the buy back 7. The process and methodology to be adopted for the buy back 8. The maximum amount to be invested under the buy back 9. The minimum and the maximum number of securities that the company proposes to buy back sources of funds from which the buy back would be made and the cost of financing the buy back. 10. Brief information about the company. 11.Audited Financial information for the last 3 years and the lead manager shall ensure that the particulars (audited statement and un-audited statement) contained therein shall not be more than more than 6 months old from the date of the public announcement together with financial ratios as may be specified by the Board. 12.Details of escrow account opened and the amount deposited therein. 13. Listing details and stock market data; (a) High, Low and average market prices of the securities of the company proposed to be bought back, during the preceding three years;15. Present capital structure (including the number of fully paid and partly paid securities) and shareholding pattern. 16. The capital structure including details of outstanding convertible instruments, if any post buy back. 17. The aggregate shareholding of the promoter group and of the directors of the promoters, where the promoter is a company and of persons who are in control of the company. 18. The aggregate number of equity shares purchased or sold by persons mentioned in clause 17 above during a period of twelve months preceding the date of the public announcement; the maximum and minimum price at which purchases and sales referred to above were made along with the relevant dates. 19. Management discussion and analysis on the likely impact of buy back on the company�s earnings, public holdings, holdings of NRIs/FIIs etc., promoters holdings and any change in management structure. 20. The details of statutory approvals obtained. 21. Collection and bidding centres. 22. Name of Compliance officer and details of investors service centres. 23. Such other disclosures as may be specified by the Board from time to time by way of guidelines. 24. The Public announcement
should be dated and signed by the Board of Directors of the company.
68. "or the contents of public notice issued after the passing of the resolution by the Board of Directors authorising the buy-back" inserted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999
SCHEDULE
III
The letter of offer shall, inter-alia, contain the following; 1. Disclaimer Clause as may be prescribed by the Board. 2. Details of the offer including the total number and percentage of the total paid up capital and free reserves proposed to be bought back and price. 3. The proposed time table from opening of the offer till the extinguishment of the certificates. 4. The Specified date. 5. Authority for the offer of buy back. 6. A full and complete disclosure of all material facts including the contents of the explanatory statement annexed to the notice for the general meeting at which the special resolution approving the buy back was passed 69*[or the contents of public notice issued after the passing of the resolution by the Board of Directors authorising the buy-back]. 7. The necessity for the buy back 8. The process to be adopted for the buy back 9. The maximum amount to be invested under the buy back 10. The minimum and the maximum number of securities that the company proposes to buy back sources of funds from which the buy back would be made and the cost of financing the buy back. 11. Brief information about the company. 12. Audited Financial information for the last 3 years and the lead manager shall ensure that the particulars (audited statement and un-audited statement) contained therein shall not be more than more than 6 months old from the date of the offer document together with financial ratios as may be specified by the Board. 13. Details of escrow account opened and the amount deposited therein. 14. Listing details and stock market data; (a) High, Low and average market prices of the securities of the company proposed to be bought back, during the preceding three years;15. Present capital structure (including the number of fully paid and partly paid securities) and shareholding pattern. 16. The capital structure including details of outstanding convertible instruments, if any post buy back. 17.The aggregate shareholding of the promoter group and of the directors of the promoters, where the promoter is a company and of persons who are in control of the company. 18. The aggregate number of equity shares purchased or sold by persons mentioned in clause 17 above during a period of twelve months preceding the date of the public announcement and from the date of public announcement to the date of the letter of offer; the maximum and minimum price at which purchases and sales referred to above were made along with the relevant dates. 19. Management discussion and analysis on the likely impact of buy back on the company�s earnings, public holdings, holdings of NRIs/FIIs etc., promoters holdings and any change in management structure. 20. The details of statutory approvals obtained. 21. Collection and bidding centres. 22. Name of Compliance officer and details of investors service centres. 23. (1) A declaration to be signed by at least two whole time directors that there are no defaults subsisting in repayment of deposits, redemption of debentures or preference shares or repayment of a term loans to any financial institutions or banks. (2) A declaration to be signed by at least two whole time directors, one of whom shall be the managing director stating that the Board of Directors has made a full enquiry into the affairs and prospects of the company and that they have formed the opinion - (b) in forming their opinion for the above purposes, the directors shall take into account the liabilities as if the company were being wound up under the provisions of the Companies Act, 1956 (including prospective and contingent liabilities). (i) they have inquired into the company�s state of affairs; and24. Such other disclosures as may be specified by the Board from time to time by way of guidelines. 25. The offer document
should be dated and signed by the Board of Directors of the company.
Foot notes 69. "or the contents of public notice issued after the passing of the resolution by the Board of Directors authorising the buy-back" inserted by the SEBI (Buy-back of Securities) (Amendment) Regulations, 1999 published in the Official Gazette of India dated 21.09.1999
SCHEDULE
IV
(1) Every merchant banker shall, while submitting the offer document or a copy of the public announcement to the Board, pay fees as set out below: - Size of the buy back
offer Proposed fee (Rs.) upto 5 crores 25, 000
(2) Fees referred to in clause (1) above shall be paid in the following manner: (a) The fees shall be paid along with the draft of the offer document or public announcement submitted to the Board; |
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