In order to bring greater transparency regarding reasons for encumbrance, particularly when significant shareholding by promoter along with persons acting in concert (PACs) with him is encumbered.
The Securities and Exchange Board of India came up with a new Circular SEBI/HO/CFD/DCR1/CIR/P/2019/90 dated August 07, 2019 which calls for additional disclosure requirements under Regulation 31(1) read with Regulation 28(3) of Takeover Regulations
(i) The promoter of every listed company shall specifically disclose detailed reasons for encumbrance if the combined encumbrance by the promoter along with PACs with him equals or exceeds:
In the format specified provided at Annexure-II of the Circular dated August 07, 2019.
(ii) Some of the important points of the Circular are as follows:
As on September 30, 2019, he shall specifically make first disclosure on detailed reasons for encumbrance in the format provided at Annexure – II, by October 04, 2019;
(iii) Timelines for Disclosures:
The disclosure on reasons for encumbrance in the format provided at Annexure- A shall be made to, –
The listed companies shall disclose the contents of Annexure – II on their websites within Two (2) working days of receipt of such disclosure.
(iv) Effective Date:
The provisions of this Circular shall come into effect from October 01, 2019.