INDEX
1. SUMMARY OF SEBI CIRCULARS
♠ circular dated April 17, 2015
♠ circular dated October 10, 2016
♠ circular dated January 05, 2017
♠ circular dated March 27, 2017
2. Liabilities Of Promoters And Directors In Case Of Non Compliance
3. Procedure For Providing Exit To The Shareholders By ELCs
SEBI vide circular dated May 30, 2012 issued guidelines for the exit of Derecognized/Non-operational Stock Exchanges. SEBI vide aforementioned circular also prescribed the process to be followed by the ELCs on Stock Exchanges seeking de-recognition or Stock Exchanges which have already been de-recognized by SEBI with regard to the exit option to their shareholders, by allowing the Exclusively Listed Companies to get listed on Nationwide Stock Exchanges after complying with the diluted listing norms of Nationwide Stock Exchanges, failing which they would be moved to the Dissemination Board (DB).
Further, SEBI vide circular dated May 22, 2014 provided that ELCs may also opt for voluntary delisting before the de-recognition of Stock Exchanges by following the existing delisting norms of SEBI, failing which, they shall be moved to the Dissemination Board.
Subsequently, SEBI vide circular dated April 17, 2015 allowed a period of eighteen months to ELCs to obtain listing upon compliance with the listing requirements of the nation-wide stock exchanges and those ELCs which fail to list themselves on the nationwide stock exchanges under the aforesaid mechanism shall provide exit opportunity to its members/investors.
Thereafter, SEBI vide circular dated October 10, 2016 provided a period of three months to the Exclusively Listed Companies (ELCs) on the Dissemination Board (DB) to submit an action plan to list or to provide exit to shareholders to the designated stock exchanges.
Further, SEBI vide circular dated January 05, 2017 extended the time to submit plan of action till March 31, 2017 which was again extended by SEBI vide circular dated March 27, 2017 till June 30, 2017.
LIABILITIES OF PROMOTERS AND DIRECTORS IN CASE OF NON COMPLIANCE
Any promoter or director whose company is on the DB and has failed to demonstrate adequacy of efforts for providing exit to their shareholders in conformity with the exit mechanism as provided in this circular shall be liable for the following actions:
- The company, its directors, its promoters and the companies which are promoted by any of them shall not directly or indirectly associate with the securities market or seek listing for any equity shares for a period of ten years from the exit from the DB.
- Freezing of shares of the promoters/directors.
- List of the directors, promoters etc. of all non-compliant companies as available from the details of the company with nationwide stock exchanges shall be disseminated on SEBI website and shall also be shared with other respective agencies.
- Attachment of bank accounts/other assets of promoters/directors of the companies so as to compensate the investors
THE FOLLOWING PROCEDURE HAS TO BE UNDERTAKEN BY ELCs TO PROVIDE EXIT TO THEIR INVESTORS FROM DISSEMINATION BOARD OF BSE BY WAY OF DELISTING OF SHARES:
INITIAL STEP:
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FURTHER STEPS:
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DHRUV KHANDELWAL (CS, LL.B.)
1317, Deshbandhu Gupta Road,
Karol Bagh, New Delhi-110005
Tel: +91 9999932450
