Friday, February 15, 2013

SCHEME OF ARRANGEMENT - SEBI PRIOR COMMENT MANDATORY


  • Listed companies desirous of undertaking a Scheme of Arrangement under Chapter V of the Companies Act, 1956, (Amalgamation/ Merger/ Reconstruction/ Reduction Of Capital, etc.) shall file the Draft Scheme with the stock exchanges
  • Such listed companies shall place before its Audit Committee the Valuation Report obtained from an Independent Chartered Accountant. The Audit Committee shall furnish a report recommending the Draft Scheme, taking into consideration, inter alia, the aforementioned valuation report.
  • The stock exchanges shall process the Draft Scheme (including seeking clarifications from company and/or Opinion from Independent Chartered Accountant.) and forward their "Objection/No-Objection" letter on the Draft Scheme to SEBI.
  • The stock exchanges, upon receipt of comments from SEBI shall issue Observation Letter to the listed company.
  • Draft Scheme and observation will be circulated to shareholders for approval and shall also be submitted to the high court.
  • The draft scheme and stock exchange observation shall be disclosed on website of the company and of stock exchange.
  • Listed companies shall ensure that the Scheme submitted with the Hon'ble High Court for sanction, provides for obtaining shareholders' approval through special resolution passed through postal ballot and e-voting.

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