{"id":127,"date":"2015-06-24T12:36:56","date_gmt":"2015-06-24T12:36:56","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=127"},"modified":"2021-11-02T16:58:45","modified_gmt":"2021-11-02T11:28:45","slug":"delisting-regulations-for-equity-shares","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/delisting-regulations-for-equity-shares\/","title":{"rendered":"Delisting Regulations for equity shares"},"content":{"rendered":"

DELISTING REGULATIONS FOR EQUITY SHARES<\/em><\/strong><\/span><\/h1>\n

\"Untitled5A\"<\/a>The Securities and Exchange Board of India (\u201cSEBI<\/a>\u201d), issued a notification dated June 10, 2009 on delisting of equity shares from stock markets through the SEBI (Delisting of Equity Shares) Regulations, 2009 (\u201c2009\u00a0Regulations\u201d).<\/p>\n

These Regulations came into force with immediate effect and cover additional grounds from the pre-existing delisting regulations of 2003 (\u201c2003 Regulations\u201d).<\/p>\n

Delisting essentially takes place when the securities of a publicly traded company are removed on account of certain reasons from the stock exchange where they are listed, and are broadly categorized as voluntary or compulsory delisting. The reasons for delisting are very company specific and cannot be generalized.<\/a><\/p>\n

The 2009 Regulations have brought about some radical changes compared to the 2003 Regulations. Now, delisting will not be allowed against any preferential allotment made by a company nor will a promoter be allowed to use the funds of the company to finance an exit option.<\/p>\n

Even for a voluntary delisting of equity shares with an exit option, a shareholders\u2019 meeting has to be conducted through postal ballot and the resolution is to be acted upon\u00a0only if\u00a0the votes of the public shareholders in favour of the proposal is\u00a0twice\u00a0the number of votes against it.<\/p>\n

This is vastly different from the 2003 Regulations wherein only a special resolution had to be passed for a voluntary delisting.<\/p>\n

In case of a compulsory delisting, the 2009 Regulations provide that the company, its whole-time directors, its promoters and any other companies promoted by them, will not be able to list equity shares in any recognized stock market for a period of ten years from the date of delisting.<\/p>\n

As per the 2003 Regulations, reinstatement of delisted securities could be done after a cooling period of two years itself.<\/p>\n

New provisions for \u201csmall companies\u201d have also been added to the 2009 Regulations. Small companies have been defined as those companies having a paid-up capital of INR 10 million (US $ 200,000 approximately) or less and whose shares have not been traded for the past one year on any recognized stock exchange.<\/p>\n

If the paid-up capital is more than INR 10 million (US $ 200,000 approximately), it should have less than three hundred shareholders to derive benefits of a \u201csmall company.\u201d<\/p>\n

Such \u201csmall companies\u201d can get their equity shares delisted without following the lengthy procedure specified in the 2009 Regulations for other companies.<\/p>\n

The 2009 Regulations appear to have brought more structure to the process of delisting of equity shares.<\/p>\n

An in-depth analysis of these regulations and its comparison with the 2003 Regulations will be discussed in detail in our forthcoming Capital Market Bulletin.<\/p>\n

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional\u00a0endeavors. For query or help, contact: singh@carajput.com<\/a>\u00a0or call at 9555555480<\/p>\n

\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

DELISTING REGULATIONS FOR EQUITY SHARES The Securities and Exchange Board of India (\u201cSEBI\u201d), issued a notification dated June 10, 2009 on delisting of equity shares from stock markets through the SEBI (Delisting of Equity Shares) Regulations, 2009 (\u201c2009\u00a0Regulations\u201d). These Regulations came into force with immediate effect and cover additional grounds from the pre-existing delisting regulations …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18,12],"tags":[2848,2849],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/127"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=127"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/127\/revisions"}],"predecessor-version":[{"id":1867,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/127\/revisions\/1867"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=127"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=127"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=127"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}