General Manager
Secondary Market Department
Email: pkb@sebi.gov.in

SEBI/SMD/Policy/List/Cir -17/2003
May 08, 2003

The Executive Director/Managing Director
Of All the Stock Exchanges

Dear Sir/Madam,

Sub:  Amendment to the listing agreement regarding disclosure pertaining to schemes of arrangement/merger/amalgamation /reconstruction filed before the Court.

There have been instances where pursuant to schemes of arrangement / amalgamation / merger / reconstruction / reduction of capital sanctioned by the High Court under Sec 391, 394 and 101 of Companies Act, companies have been seeking listing/ delisting on the stock exchanges and in the process sometimes violating or overriding or circumscribing the provisions of securities laws or the requirement of stock exchanges.

In order to ensure that listed companies do not in anyway violate or override or circumscribe the provisions of securities laws or the stock exchange requirements, it has been decided to make suitable amendments in the Listing agreement.

Therefore, you are hereby directed under section 11(1) and 11B of the Securities and Exchange Board of India Act, 1992 to immediately take steps to amend the listing agreement as follows :

1. In clause 24 of the Listing Agreement, three new sub-clauses (f), (g) and (h) shall be added as under –

(f) “The company agrees that it shall file any scheme/petition proposed to be filed before any Court or Tribunal under sections 391, 394 and 101 of the Companies Act, 1956, with the stock exchange, for approval, at least a month before it is presented to the Court or Tribunal.”

(g) “The company agrees to ensure that any scheme of arrangement/ amalgamation/ merger/ reconstruction/ reduction of capital, etc., to be presented to any Court or Tribunal does not in any way violate, override or circumscribe the provisions of securities laws or the stock exchange requirements.

(h) “Explanation: For the purposes of this sub-clause, ‘securities laws’ mean the SEBI Act, 1992, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the provisions of the Companies Act, 1956 which are administered by SEBI under section 55A thereof, the rules, regulations, guidelines etc. made under these Acts and the Listing Agreement.”

(i) “The  company agrees that in the explanatory statement forwarded by it to the shareholders u/s 393 or accompanying a proposed resolution to be passed u/s 100 of the  Companies Act, it shall disclose the pre and post-arrangement or amalgamation (expected) capital structure and shareholding pattern.”

2. Clause 31(c ) of the Listing Agreement shall be substituted as under –

(c ) “three copies of all the notices, call letters or any other circulars including notices of meetings convened u/s 391 or section 394  read with section 391 of the Companies Act, 1956, together with Annexures thereto, at the same time as they are sent to the shareholders, debenture holders or creditors or any class of them or advertised in the Press.”

The undersigned has been authorised to issue this direction to amend the listing agreement.

You are also directed to communicate to SEBI, the status of the implementation of the provisions of this circular in Section II, Item No. 13 of the Monthly Development Report for the month of May 2003.

Yours faithfully,
P K BINDLISH

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