MANU/SSMD/0007/2024
Ministry : Securities and Exchange Board of India
Department/Board : Corporation Finance Department
Circular No. : SEBI/HO/CFD/PoD-1/P/CIR/2024/016
Date : 13.03.2024
Notification/ Circulars Referred : Circular No. CIR/CFD/DIL3/18/2015 dated December 31, 2015 MANU/SDIP/0008/2015;Circular No. CFD/DIL3/CIR/P/2016/53 dated May 03, 2016 MANU/SSMD/0006/2016
Citing Reference:
Circular No. CIR/CFD/DIL3/18/2015 dated December 31, 2015 MANU/SDIP/0008/2015 Referred
Circular No. CFD/DIL3/CIR/P/2016/53 dated May 03, 2016 MANU/SSMD/0006/2016 Referred
To
All Recognised Stock Exchanges
Dear Sir/Madam,
Repeal of circular(s) outlining procedure to deal with cases where securities are issued prior to April 01, 2014
Ref: Circular No. CIR/CFD/DIL3/18/2015 dated December 31, 2015 and Circular No. CFD/DIL3/CIR/P/2016/53 dated May 03, 2016.
1. In exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992, SEBI had issued Circular No. CIR/CFD/DIL3/18/2015 dated December 31, 2015 and Circular No. CFD/DIL3/CIR/P/2016/53 dated May 03, 2016, stating that in respect of cases under the Companies Act, 1956, involving issuance of securities to more than 49 persons but up to 200 persons in a financial year, the companies may avoid penal action if they provide the investors with an option to surrender the securities and receive the refund amount at a price not less than the amount of subscription money paid along with 15% interest p.a. thereon or such higher return as promised to the investors. This opportunity to avoid penal action was provided to the issuer companies considering the higher cap for private placement provided in the Companies Act, 2013.
2. Given that considerable time has elapsed since the repeal of the
Companies Act, 1956, in exercise of the powers conferred under Section 11(1) of
the Securities and Exchange Board of India Act, 1992 to protect the interests of
investors in securities and to promote the development of, and to regulate the
securities markets, it has now been decided to repeal the aforesaid circulars
and the same shall stand rescinded with effect from 6 months from the date of
issue of this circular, without prejudice to the operation of anything done or
any action taken under the said circulars.
3. The above said option shall be available under the circular only to those companies who have completed the entire procedure and submitted the certificate in terms of circular No. CIR/CFD/DIL3/18/2015 dated December 31, 2015 and Circular No. CFD/DIL3/CIR/P/2016/53/dated May 03, 2016, within 6 months from the date of issue of this circular.
4. Accordingly, all cases involving an offer or allotment of
securities to more than the permissible number of investors in a financial year
shall be dealt with in line with the provisions contained under the extant
applicable laws.
5. The Stock Exchanges are advised to bring the provisions of this circular to the notice of listed entities and also to disseminate the same on their websites.
6. A copy of this circular is available on SEBI website at www.sebi.gov.in under the categories "Legal Framework → Circulars".
Yours faithfully,
Yogita Jadhav
General Manager
Corporation Finance Department