Corporate Professionals Blog

With a view to enhance transparency, ensure adequate audit trail and to plug the entities misusing the private placement route to garner funds, the Capital Market Regulator, SEBI vide its notification dated 26th August, 2013, has made certain amendments in the Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. SEBI’s initiative is surely a welcoming step that aims at aligning private placement norms applicable on listed companies with the new Companies Bill on one hand and to cork regulatory loopholes and protect investors’ interest on the other.

Facts: Ambattur Enterprises Limited a company listed at Madras Stock Exchange filed an appeal with SAT against the SEBI order of rejecting the Exemption Application filed by the Company claiming exemption from provisions of Regulations 8(1)(b), 27(3)(d) of SEBI (Delisting of Equity Shares)  Regulations,  2009. Hon’ble SAT set aside the impugned order passed by the Board and remitted the case to the Board for passing a fresh order in accordance with law giving reasons in support of its conclusions. Company filed Exemption Application on the following grounds: NIL trading activity since 1995 at MSE (the only Exchange where the Company is listed). Inability of the promoters to off load their shareholding to comply with the requirement of Clause 40A of the listing agreement. The public shareholders held 17.66 % of the capital being only 32 in number.