tag:blogger.com,1999:blog-218162562635694448.post4677893892754245888..comments2024-03-25T18:45:46.768+05:30Comments on Initial Private Opinion: Meeting the Jalan committeeSandeep Parekhhttp://www.blogger.com/profile/08840653819247769331noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-218162562635694448.post-89415162395352736192010-12-26T13:54:24.767+05:302010-12-26T13:54:24.767+05:30Section 4B (8) makes it mandatory for the exchange...Section 4B (8) makes it mandatory for the exchanges to go public. See the language:<br /><br />"(8) Every recognised stock exchange, in respect of which the scheme for corporatization or demutualisation has been approved under sub-section (2), shall, either by fresh issue of equity shares to the public or in any other manner as may be specified by the regulations made by the Securities and Exchange Board of India, ensure that at least fifty-one per cent of its equity share capital is held, within twelve months from the date of publication of the order under sub-section (7), by the public other than shareholders having trading rights:"<br /><br />The phrase " shall, ...by fresh issue of equity shares to the public" does not give any other meaning but mandatory listing of its securities by an exchange.<br /><br />Further, Regulation 4 of the most debated SECURITIES CONTRACTS (REGULATION) (MANNER OF INCREASING AND MAINTAINING PUBLIC SHAREHOLDING IN RECOGNISED STOCK EXCHANGES) REGULATIONS, 2006 ( MIMPS Regulations) also provide for listing. See the following extract of the regulation.<br /><br />“Manner of increasing the public shareholding<br /><br />4. Subject to the provisions of sub-section (8) of section 4B of the Act and the scheme, the recognised stock exchange shall ensure that at least fifty-one percent of its equity share capital is held by the public, either by fresh issue of equity shares to the public through issue of prospectus or in the following manner: -<br /><br />(a) offer for sale, by issue of prospectus, of shares held by shareholders having trading rights therein;”<br /><br /><br />The above regulation makes it a vested right for the shareholders of the Exchanges to go public. <br /><br />If somebody wants to be under false illusions that there is a merit in saying that shareholders were never promised listing, let them be. As far as the law is concerned, it is very clear. <br /><br />In any case, if law enables listing at the time of my investment, how can it disable now after I am trapped into investing?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-218162562635694448.post-89090106225825760202010-12-22T19:55:39.497+05:302010-12-22T19:55:39.497+05:30Can it not be argued that Cl. 6 of the C&D Sch...Can it not be argued that Cl. 6 of the C&D Scheme is merely enabling? Further,there is no time schedule specified in Cl. 6 as contemplated in the proviso to Cl. 1 of the Scheme. In these circumstances, the claim that shareholders were never "promised" listing may be difficult to fault.Renganathhttps://www.blogger.com/profile/07911643264523245215noreply@blogger.com