DIVISION CHIEF SECONDARY MARKET DEPARTMENT
To,
The Executive /Managing Directors of all the recognised stock exchanges
Dear Sir,
Views of SEs on Reverse Mergers
There have been instances where unlisted companies have resorted to reverse merger route by merging with listed companies. Although, such reverse mergers take place after getting the consents of the members of both the companies through AGM and the ratio of shares to the exchanged is cleared by the respective High Court, yet there remain the possibilities that:
25% of the post issue capital may not be in the hands of the public. (Rule 19(2)(b) of the SCRA.
The listing of additional shares takes place without full disclosure.
There may as well be some other implications regarding the listing of such companies and hence, we would like to have the views of all the recognised stock exchanges in the matter. Therefore, you are requested to please send your views on the subject within a fortnight of receipt of this letter.
Thanking you,
Yours faithfully, sd/-
R.C.GUPTA