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Request for guidance under SEBI (Informal Guidance) Scheme, 2003 - GTL Limited

Jun 09, 2004
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Informal Guidance
 

June 9, 2004

Securities and Exchange Board of India,
B Wing, Mittal Court,
Nariman Point,
Mumbai – 400 021  

Kind attention: Ms. Neelam Bharadwaj / Ms. Sangeeta Rathod

Dear Sir/Madam,

Sub: Request for guidance under SEBI (Informal Guidance) Scheme, 2003 – for issue of FCCB with approval of Central Government under Section 81 (3) of the Companies Act, 1956

 

The Company is in the business of Network Engineering and IT Services. With a view to participate in the emerging opportunities, it intends to issue Foreign Currency Convertible Bonds (FCCB) in the international markets. Accordingly with the approval of Shareholders (by Special Resolution), it has made an application to the Central Government for permission under Section 81 (3) of the Companies Act 1956 (Act). A copy of the said application is enclosed for your perusal.

We believe that the issue of FCCBs is governed by the provisions of Section 81 (3) of the Act and hence neither the provisions of SEBI guidelines is applicable nor approval of SEBI is required. Our belief is based on the following:

  1. Relevant provisions of Companies Act:

    2.  

      Conclusion: Issue of FCCB is covered by Section 81 (3) of the Act.

    1. Relevant provisions of SEBI Guidelines:

      2. Conclusion: SEBI Guidelines for Preferential Issues not applicable to FCCB issues as the same is covered by Section 81 (3) of the Act.

    2. Relevant provisions of FEMA:

      3.  

In the light of the above kindly clarify whether our following belief is correct

 

  1. The Preferential Issue Guidelines of SEBI are not applicable to our proposed issue of FCCB under Section 81 (3) of the Act

    2.  

  2. No approval of SEBI is required for the said purpose

For the above purpose we send herewith DD No. 067429 dated 11/06/2004 for Rs. 25000 (Rupees Twenty Five Thousand Only) drawn on Development Credit Bank, in favour of SEBI, towards the prescribed fee.

Kindly treat this as an interpretive letter and give your advise at the earliest.

 

Thanking you,

 

Yours faithfully,

For GTL Limited

D. S. Gunasingh Laxmikant Y. Desai

Jt. Company Secretary Head – Capital Markets & CIRO