SEBI Update: Repeal of Circular(s) Outlining Procedure for Cases Where Securities Were Issued Prior to April 01, 2014, Involving Offer/Allotment to More Than 49 but Up to 200 Investors in a Financial Year

15 Mar 2024
  • DMD Advocates
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On March 13, 2024 the Securities and Exchange Board of India (SEBI) repealed two circulars Circular No. CIR/CFD/DIL3/18/2015 dated December 31, 2015 and Circular No. CFD/DIL3/CIR/ P/2016/53 dated May 03, 2016.

The repealed circulars provide for procedural specifics for private placement of shares, viz., for refund to security holders, certification and relaxations in procedure. The circulars stated that in respect of cases under the Companies Act, 1956, involving private placement of shares, 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.

SEBI has deemed the repeal the said circulars given that considerable time has elapsed since the repeal of the Companies Act, 1956.

To access the circular, click here.

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