R. EXECUTIVE DIRECTOR
The Presidents/Executive Directors,
of all the Stock Exchanges.
Forfeiture of 1% Listing Deposit
This has reference to SEBI’s letter No.SMD/SED/94/2114 dated April 12, 1994. SEBI has been receiving complaints that issues are listed on stock exchanges and trading is allowed before a company has completed despatch of all share certificates. This results in a shortage of available scrips for trading and can be a tool in the hands of manipulators. The exchanges are hereby requested to ensure that no listing or trading permission is granted unless an unambiguous certificate is obtained from the company concerned that all share certificates have been despatched.
Clause 42 of the listing agreement allows the Stock Exchanges to seek 1% deposit of the amount of securities offered for subscription by the company. Regulations 2.3A(iii) of the Stock Exchange Regulations prescribes that the aforesaid amount can be forfeited if the company has not complied with the requirements and conditions of listings as laid down by the stock exchange. Hence, it is suggested that the stock exchanges should consider using this provision, if they find that the company has issued any false certificates claiming complete despatch of share certificates/refund orders.
C. B. BHAVE
Do you think CBDT should extend Tax Audit Report and relevant ITR Due Date? Please Comment, Vote, Retweet and Like.— Tax Guru (@taxguru_in) September 18, 2018