| Buy_Back_Of_Securities_Mar06_2017 |
| 1 (a) These regulations shall be called the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998.(b) These regulations shall come into force on the date of their publication in the Official Gazette. |
| 2 (1) In these regulations, unless the context otherwise requires :- (a) 'Act' means the Securities and Exchange Board of India Act, 1992; (b) 'associate' includes a person - (i) who directly or indirectly by himself or in combination with relatives, exercise control over the company or, (ii) whose employee, officer or director is also a director, officer or employee of another company ; (c) 'Board' means the board as defined in clause (a) of sub-section (1) of section 2 of the Act of Securities (Amendment) Regulations, 1999, w.e.f. 21-09-1999. (d) 'control' shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or security-holders or voting agreements or in any other manner; (e) ' company ' includes a company registered under the Companies Act, 1956, any buys or intends to buy its own shares or other specified securities in accordance with these regulations; (g) 'insider' means an insider as defined in clause (e) of regulation 2 of the Securities and Exchange Board of India (Insider Trading) Regulations, 1992; (h) 'merchant banker' means a merchant banker registered under section 12 of the Act; (i) 'Ordinance' means the Companies (Amendment) Act, 1999 (21 of 1999); (j) 'promoter' means 'promoter' as defined in clause (h) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997; (k) 'registrar' means a registrar to an issue and includes a share transfer agent registered under section 12 of the Act; (l) ' securities ' means ' securities ' as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); (la) 'small shareholder' means a shareholder of a listed company , who holds shares or other specified securities whose market value, on the basis of closing price of shares or other specified securities , on the recognised stock exchange in which highest trading volume in respect of such security, as on record date is not more than two lakh rupee; (m) 'statutory auditor ' means an auditor appointed by a company under section 224 of the Companies Act, 1956 ; (n) 'stock exchange' means a stock exchange which has been granted recognition under section 4 of the Securities Contracts (Regulation) Act, 1956; (o) 'tender offer' means an offer by a company to buy-back its shares or other specified securities through a letter of offer from the holders of the shares or other specified securities of the company ; [(p) 'working day' means any working day of the Board.] |
| 3 (1) These regulations shall be applicable to buy-back of shares or other specified securities of a company listed on a stock exchange. |
| 3 (2) Not withstanding anything contained in sub-regulation (1), a company listed on a stock exchange shall not buy-back its shares or other specified securities so as to delist its shares or other specified securities from the stock exchange. |
| 4 (1) A company may buy-back its shares or other specified securities by any one of the following methods :- (a) from the existing security-holders on a proportionate basis through the tender offer; (b) from the open market through- (i) book-building process, (ii) stock exchange; (c) from odd-lot holders:Provided that no offer of buy-back for fifteen per cent or more of the paid up capitaland free reserves of the company shall be made from the open market. |
| 4 (2) A company shall not buy-back its shares or other specified securities from any person through negotiated deals, whether on or of the stock exchange or through spot transactions or through any private arrangement. |
| 4 (3) Any person or an insider shall not deal in securities of the company on the basis of unpublished information relating to buy-back of shares or other specified securities of the company. |
| 4 (4) A company shall not make any offer of buy-back within a period of one year reckoned from the date of closure of the preceding offer of buy-back, if any. |
| 5 (1) For the purposes of passing a special resolution under sub-section (2) of section 77A of the Companies Act, the explanatory statement to be annexed to the notice for the general meeting pursuant to section 173 of the Companies Act shall contain disclosures as specified in Schedule II, Part A. |
| 5 (2) A copy of the resolution passed at the general meeting under sub-section (2) of section 77A of the Companies Act, shall be filed with the Board and the stock exchanges where the shares or other specified securities of the company are listed, within seven days from the date of passing of the resolution. |
| 5A (1) A company, authorised by a resolution passed by the Board of Directors at its meeting, to buy back its shares or other specified securities under first proviso to clause (b) of sub-section (2) of section 77A of the other specified securities subject to the following conditions: (a)before making a public announcement under sub regulation (1) of regulation 8, a public notice shall be given in atleast one English national daily , one Hindi national daily and a regional language daily, all with wide circulation at the place where the registered office of the company is situated,the public notice shall be given within 2 days of the passing of the resolution by the Board of Directors; the public notice shall contain the disclosures as specified in schedule I. |
| 5A (2) A copy of the resolution, passed by the Board of Directors at its meeting, authorising buy back of its shares or other specified securities , shall be filed with the Board and the stock exchanges where the shares or other specified securities of the company are listed, within two days of the date of the passing of the resolution. In the above substituted regulation the words " securities " wherever occurring was substituted by the words "shares and other specified securities " by the company are listed, within two working days of the date of the passing of the resolution. |
| 6 A company may buy-back its shares or other specified securities from its existing security-holders on a proportionate basis in accordance with the provisions of this Chapter; Provided that fifteen percent of the number of securities which the company proposes to buy back or number of securities entitled as per their shareholding, whichever is higher, shall be reserved for small shareholders. |
| 7 The explanatory statement annexed to the notice under section 173 of the Companies Act, shall contain the disclosures mentioned in regulation 5 and also the following disclosures:- (a) the maximum price at which the buy-back of shares or other specified securities shall be made and whether the Board of Directors of the company are being authorised at the general meeting to determine subsequently the specific price at which the buy-back may be made at the appropriate time; (b) if the promoter intends to offer their shares or other specified securities,(i) the quantum of shares or other specified securities proposed to be tendered, and (ii) the details of their transactions and their holdings for the last six months prior to the passing of the special resolution for buy-back including information of number of shares or other specified securities acquired. |
| 8 (1) The company which has been authorised by a special resolution or a resolution passed by the Board of Directors at its meeting shall make a public announcement within two working days from the date of resolution in at least one English National Daily, one Hindi National Daily and a Regional language daily all with wide circulation at the place where the Registered office of the company is of following:(1) The company which has been authorised by a special resolution or a resolution passed by the Board of Directors at its meeting shall before buy back of shares or other specified securities make a public announcement in at least one English National Daily, one Hindi National Daily and a Regional language daily all with wide circulation at the place where the Registered office of the company is situated and shall contain all the material information as specified in schedule II. In the substituted sub-regulation (1) above the words 'shares and other specified securities' were substituted for the words "specified securities", which had earlier been situated and shall contain all the material information as specified in Schedule II, PartA. |
| 8 (1A) A copy of the public announcement along with the soft copy, shall also be submitted to the Board simultaneously through a merchant banker.] |
| 8 (4) The company shall within five working days of the public announcement file with the Board a draft-letter of offer, along with soft copy, containing disclosures as specified in Schedule III through a merchant banker who is not associated with the company. |
| 8 (5) The draft letter of offer referred to in sub-regulation (4) shall be accompanied with fees specified in Schedule IV. |
| 8 (6)The Board may give its comments on the draft letter of offer not later than seven working days of the receipt of the draft letter of offer; Provided that in the event the Board has sought clarifications or additional information from the merchant banker to the buyback offer, the period of issuance of The words, symbols and numbers "(2) The public announcement shall specify a date, which shall be the 'specified date' for the purpose of determining the names of the security-holders to whom the letter of offerback for the words ' shareholders ' "(3) The specified date shall not be later than thirty days from the date of the following:(6) The letter of offer shall be dispatched not earlier than twenty-one days from its submission to the Board under sub-regulation (4):Provided that if, within twenty-one days from the date of submission of the draft letter of offer, the Boardspecifies modifications, if any, in the draft letter of offer, (without being under any obligation to do so) the merchant banker and the company shall carry out such modifications before the letter of offer is dispatched to the security-holders. Comments shall be extended to the seventh working day from the date of receipt of satisfactory reply to the clarification or additional information sought. Provided further that in the event the Board specifies any changes, the merchant banker to the buyback offer and the company shall carry out such changes in the letter of offer before it is dispatched to the shareholders . |
| 9 (1) The offer for buy-back shall remain open to the members for a period not less than fifteen days and not exceeding thirty days. |
| 9 (2) The date of the opening of the offer shall not be earlier than seven days or later than thirty days after the specified date. |
| 9 (3) The letter of offer shall be sent to the security-holders so as to reach the security- holders before the opening of the offer. |
| 9 (4) In case the number of shares or other specified securities offered by the security-holders is more than the total number of shares or other specified securities to be bought back by the company, the acceptances per security-holders shall be equal to the acceptances tendered by the security-holders divided by the total acceptances received and multiplied by the total number of shares or other specified securities to be boughtback. |
| 9 (5) The company shall complete the verifications of the offers received within fifteen days of the closure of the offer and the shares or other specified securities lodged shall be deemed to be accepted unless a communication of rejection is made within fifteen days from the closure of the offer. In the substituted regulation 9 above, the words 'security holders' where ever occurring were substituted by the for the words 'shareholders', of for the words "specified securities", which Regulations, 1999, w.e.f. 21-09-1999.(3) The date of the opening of the offer shall be not later than five working days fromthe date of dispatch of letter of offer.41[(3A). The acquirer or promoter shall facilitate tendering of shares by theshareholders and settlement of the same, through the stock exchange mechanismas specified by the Board.](4) The offer for buy back shall remain open for a period of ten working days.(5) The company shall accept shares or other specified securities from the security holders on the basis of their entitlement as on record date. |
| 9 (6) The shares proposed to be bought back shall be divided in to two categories; (a) reserved category for small shareholders and (b) the general category for other shareholders, and the entitlement of a shareholder in each category shall be calculated accordingly. |
| 9 (7) After accepting the shares or other specified securities tendered on the basis of entitlement, shares or other specified securities left to be bought back, if any in one category shall first be accepted, in proportion to the shares or other specified |
| 10 (1) The company shall as and by way of security for performance of its obligations under the regulations, on or before the opening of the offer deposit in an escrow account such sum as specified in sub-regulation (2). |
| 10 (2) The escrow amount shall be payable in the following manner,- (i) if the consideration payable does not exceed Rs. 100 crores - 25 per cent of the consideration payable; (ii) if the consideration payable exceeds Rs. 100 crores - 25 per cent upto Rs. 100 crores and 10 per cent there after. |
| 10 (3) The escrow account referred in sub-regulation (1) shall consist of: (a) cash deposited with a scheduled commercial bank, or (b) bank guarantee in favour of the merchant banker, or(c) deposit of acceptable securities with appropriate margin, with the merchant banker, or(d) a combination of (a), (b) and (c) above. |
| 10 (4) Where the escrow account consists of deposit with a scheduled commercial bank, the company shall, while opening the account, empower the merchant banker to instruct the bank to issue a banker's cheque or demand draft for the amount lying to the credit of the escrow account, as provided in the regulations. |
| 10 (5) Where the escrow account consists of bank guarantee, such bank guarantee shall be in favour of the merchant banker and shall be valid until thirty days after the closure of the offer. |
| 10 (6) The company shall, in case the escrow account consists of securities, empower the merchant banker to realise the value of such escrow account by sale or otherwise and if there is any deficit on realisation of the value of the securities, the merchant banker shall be liable to make good any such deficit. |
| 10 (7) In case the escrow account consists of bank guarantee or approved securities, these shall not be returned by the merchant banker till completion of all obligations under the regulations. |
| 10 (8) Where the escrow account consists of bank guarantee or deposit of approved securities, the company shall also deposit with the bank in cash a sum of at least one per cent of the total consideration payable, as and by way of security for fulfilment of the obligations under the regulations by the company . |
| 10 (9) On payment of consideration to all the security-holders who have accepted the offer and after completion of all formalities of buy-back, the amount, guarantee and securities in the escrow, if any, shall be released to the company. |
| 10 (10) The Board in the interest of the security-holders may in case of non-fulfilment of obligations under the regulations by the company forfeit the escrow account either in full or in part. |
| 10 (11) The amount forfeited under sub-regulation (10) may be distributed pro rata amongst the security-holders who accepted the offer and balance, if any, shall be utilised for investor protection. |
| 11 (1) The company shall immediately after the date of closure of the offer open a special account with a banker to an issue registered with the Board and deposit therein, such sum as would, together with ninety per cent. of the amount lying in the escrow account make-up the entire sum due and payable as consideration for buy-back in terms of these regulations and for this purpose, may transfer the funds from the escrow account. |
| 11 (2) The company shall complete the verifications of offers received and make payment of consideration to those security holders whose offer has been accepted or return the shares or other specified securities to the security holders within seven working days of the closure of the offer. |
| 12 (1) The company shall extinguish and physically destroy the security certificates so bought back in the presence of a Registrar to issue or the Merchant for the following:(2) The company shall within seven days of the time specified in sub-regulation (5) of regulation 9 make payment of consideration in cash to those security holders whose offer has been accepted or return the shares or other specified securities to the security holders. In the substituted regulation 9 above, the words 'security holders' where ever occurring were substituted by the for the words 'shareholders',the words 'shares or other specified securities' were substituted by the SEBI (Buy-back of Securities)(Amendment) Regulations, 2004 w.e.f. 18-06-2004 for the words "specified securities", which had earlier been21-09-1999.06-2004 for the following:Banker and the Statutory Auditor within fifteen days of the date of acceptance of theshares or other specified securities:Provided that the company shall ensure that all the securities bought - back areextinguished within seven days of the last date of completion of buy - back.](2) The 49[shares or other specified securities] offered for buy-back if alreadydematerialised shall be extinguished and destroyed in the manner specified underthe Securities and Exchange Board of India (Depositories and Participants)Regulations, 1996, and the bye-laws framed thereunder.50[(3)(a) The company shall, furnish a certificate to the Board certifying complianceas specified in sub-regulation (1) and duly certified and verified by -(i) the registrar and whenever there is no registrar by the merchant banker; (ii) two directors of the company one of whom shall be a managing director wherethere is one; (iii) the statutory auditor of the company ,(b) The certificate required under clause (a) shall be furnished to the Board on amonthly basis by the seventh day of the month succeeding the month in which thesecurities certificates are extinguished and destroyed.]51[(4) The company shall furnish, the particulars of the security certificatesextinguished and destroyed under sub-regulation (1), to the stock exchanges where"The company shall extinguish and physically destroy the security certificates so bought back in the presenceof a Registrar or the Merchant Banker, and the Statutory Auditor within seven days from the date ofacceptance of the specified securities."In the above substituted sub-regulation (1):the words "security certificates" appearing after the words "destroy the" and before the words "so boughtRegulations, 1999, w.e.f. 21-09-1999.word "shares" by the SEBI (Buy-back of of 06-2004 for the following:"(3) The company shall furnish a certificate to the Board duly verified by - (a)(b)(c)the registrar and whenever there is no registrar through the merchant banker;two whole-time Directors including the Managing Director and,the statutory auditor of the company , and certifying compliance as specified in sub-regulation (1), within seven days of extinguishment and destruction of the certificates."the shares of the company are listed on a monthly basis by the seventh day of themonth succeeding the month in which the securities certificates are extinguished and destroyed. |
| 12 (5) The company shall maintain a record of security certificates which have beencancelled and destroyed as prescribed in sub-section (9) of section 77A of theCompanies Act. |
| 13 The provisions pertaining to buy-back through tender offer as specified in this Chapter shall be applicable mutatis mutandis to odd-lot 53[shares or other specified |
| 14 (1) A company intending to buy-back its shares or other specified securities from the open market shall do so in accordance with the provisions of this Chapter. 06-2004 for the following: "The particulars of the security certificates extinguished and destroyed under sub-regulation (1) shall be furnished to the stock exchanges where the specified securities of the company are listed within seven days of extinguishment and destruction of the certificates." In the above substituted sub-regulation (1): the words "security certificates" appearing after the words "particulars of the" and before the word (Amendment) Regulations, 1999, w.e.f. 21-09-1999. the words "specified securities" appearing at the end, after the words "exchanges where the", were substituted for the words "of the company" by the SEBI (Buy-back of 1999, w.e.f. 21-09-1999. of of |
| 14 (2) The buy-back of shares or other specified securities from the open market may be in any one of the following methods :(a) through stock exchange,(b) book-building process. 56[(3) The company shall ensure that atleast fifty per cent of the amount earmarked for buy-back, as specified in resolutions referred to in regulation 5 or regulation |
| 15 A company shall buy-back its shares or other specified securities through the stock exchange as provided hereunder :(a) The special resolution referred to in regulation 5 or the resolution passed bythe Board of Directors at its meeting as referred to in regulation 5A] shall specifythe maximum price at which the buy-back shall be made; (b) The buy-back of the 59[ shares or other specified securities ] shall not be madefrom the promoters or persons in control of the company; (c) The company shall appoint a merchant banker and make a publicannouncement as referred to in regulation 8; (d) The public announcement shall be made 60[within seven working days from thedate of passing the resolution referred to in regulation 5 or regulation 5A] 61[,and shall contain disclosures as specified in Schedule II, Part B];62[(e) Simultaneously with the issue of such public announcement, the companyshall file a copy of the public announcement with the Board along with the feesspecified in Schedule IV;]of of words "The special resolution referred to in regulation 5".of (f) The public announcement shall also contain disclosures regarding details of thebrokers and stock exchanges through which the buy-back of 63[ shares or other specified securities ] would be made;64[(g) The buy-back shall be made only on stock exchanges having nationwidetrading terminals;](h) The buy-back of 65[shares or other specified securities ] shall be made onlythrough the order matching mechanism except 'all or none' order matchingsystem;66[(i) the company shall submit the information regarding the shares or otherspecified securities bought-back, to the stock exchange on a daily basis in suchform as may be specified by the Board and the stock exchange shall upload thesame on its official website immediately;]67[(ia) The company shall upload the information regarding the shares or otherspecified securities bought-back on its website on a daily basis;](j) The identity of the company as a purchaser shall appear on the electronic screenwhen the order is placed;68[(k) The buy-back offer shall open not later than seven working days from the dateof public announcement and shall close within six months from the date of |
| 15A A company shall buy-back its shares or other specified securities in physical form through open market method as provided hereunder: of following: "(g) The buy-back shall be made only on stock exchanges with electronic trading facility;" |
| 15B Escrow account The Company shall, before opening of the offer, create an escrow account(1)towards security for performance of its obligations under these regulations, anddeposit in escrow account 25 per cent of the amount earmarked for the buy-back asspecified in the resolutions referred to in regulation 5 or regulation 5A.(2)The escrow account referred to in sub-regulation (1) may be in the form of,- (a)(b)scheduled commercial bank.cash deposited with any scheduled commercial bank; orbank guarantee issued in favour of the merchant banker by anyFor such part of the escrow account as is in the form of a cash deposit with a(3)scheduled commercial bank, the company shall while opening the account, empowerthe merchant banker to instruct the bank to make payment of the amounts lying tothe credit of the escrow account, to meet the obligations arising out of the buy-back.(4)For such part of the escrow account as is in the form of a bank guarantee:(a) the same shall be in favour of the merchant banker and shall be kept validfor a period of thirty days after the closure of the offer or till the completion ofall obligations under these regulations, whichever is later.(b) the same shall not be returned by the merchant banker till completion of allobligations under the regulations. |
| 16 (1) Subject to the provisions of sub-regulation (2) and sub-regulation (3), the provisions of regulation 12 pertaining to extinguishment of certificates shall be applicable mutatis mutandis. |
| 16 (2) The company shall complete the verification of acceptances within fifteen days of the payout. (3) The company shall extinguish and physically destroy the security certificates so bought back during the month in the presence of a Merchant Banker and the Statutory Auditor, on or before the fifteenth day of the succeeding month: Provided that the company shall ensure that all the securities bought-back are extinguished within seven days of the last date of completion of buyback. |
| 17 A company may buy-back its 72[shares or other specified securities ] through the book-building process as provided hereunder:(1) (a) The special resolution referred to in regulation 5 73[or the resolution passed bythe Board of Directors at its meeting, as referred to in regulation 5A] shall specify themaximum price at which the buy-back shall be made.(b) The company shall appoint a merchant banker and make a public announcementas referred to in regulation 8.(c) The public announcement shall be made at least seven days prior to thecommencement of buy-back.71 ibid.of (d) Subject to the provisions of sub-clauses (i) and (ii) the provisions of regulation 10shall be applicable :(i) The deposit in the escrow account shall be made before the date of the publicannouncement.(ii) The amount to be deposited in the escrow account shall be determined withreference to the maximum price as specified in the public announcement.(e) A copy of the public announcement shall be filed with the Board within two daysof such announcement along with the fees as specified in Schedule IV.(f) The public announcement shall also contain the detailed methodology of thebook-building process, the manner of acceptance, the format of acceptance to besent by the 74[security-holders] pursuant to the public announcement and the detailsof bidding centres.(g) The book-building process shall be made through an electronically linkedtransparent facility.(h) The number of bidding centres shall not be less than thirty and there shall be atleast one electronically linked computer terminal at all the bidding centres.(i) The offer for buy-back shall remain open to the 75[security-holders] for a period notless than fifteen days and not exceeding thirty days.(j) The merchant banker and the company shall determine the buy-back price basedon the acceptances received.(k) The final buy -back price, which shall be the highest price accepted shall be paidto all holders whose 76[shares or other specified securities ] have been accepted forbuy-back. |
| 18 The provisions of regulation pertaining to extinguishment of certificates shall |
| 19 (1) The company shall ensure that,- (a) the letter of offer, the public announcement of the offer or any otheradvertisement, circular, brochure, publicity material shall contain true,factual and material information and shall not contain any misleading informationand must state that the directors of the company accepts the responsibility forthe information contained in such documents ; (b) the company shall not issue any shares or other specified securities includingby way of bonus till the date of closure of the offer made under theseregulations; (c) the company shall pay the consideration only by way of cash; (d) the company shall not withdraw the offer to buy-back after the draft letter of offeris filed with the Board or public announcement of the offer to buy-back is made; (e) the promoter or the person shall not deal in the 80[shares or other specifiedsecurities] of the company in the stock exchange 81[or off-market, including inter-se transfer of shares among the promoters] during the period 82[from the date of(Buy-back of Securities) (Amendment) Regulations, 2012, w.e.f. 07-02-2012.of of 82 Substituted. ibid.passing the resolution under regulation 5 or regulation 5A till the closing of theoffer.]83[(f) the company shall not raise further capital for a period of one year from theclosure of buy-back offer, except in discharge of its subsisting obligations.] |
| 19 (2) No public announcement of buy-back shall be made during the pendency of any scheme of amalgamation or compromise or arrangement pursuant to the provisions of the Companies Act . |
| 19 (3) The company shall nominate a compliance officer and investors service centre for compliance with the buy-back regulations and to redress the grievances of theinvestors. |
| 19 (4) The particulars of the 84[security certificates] extinguished and destroyed shall be furnished by the company to the stock exchanges where the 85[shares or other specified securities ] of the company are listed within seven days of extinguishment and destruction of the certificates. |
| 19 (5) The company shall not buy-back the locked-in 86[shares or other specified securities ] and non-transferable 87[shares or other specified securities ] till the pendency of the lock-in or till the 88[shares or other specified securities ] becometransferable. |
| 19 (6) Prior to its omission, sub-regulation (6) read as follows: "Where the shares have been bought back otherwise than out of the proceeds of an earlier issue other than a fresh issue of shares made specifically for the purpose of buy-back then a sum equal to the nominal value of |
| 19 (7) The company shall within two days of the completion of buy-back issue a public advertisement in a national daily, inter alia, disclosing:(i) number of 90[shares or other specified securities ] bought; (ii) price at which the 91[shares or other specified securities ] bought; (iii) total amount invested in the buy-back; (iv) details of the 92[security-holders] from whom 93[shares or other specified securities ] exceeding one per cent of total 94[shares or other specified securities ]were bought back; and(v) the consequent changes in the capital structure and the shareholding patternafter and before the buy-back. |
| 20 The merchant banker shall ensure that- (a) the company is able to implement the offer; (b) the provision relating to escrow account as referred to in regulation 10 has beenmade; (c) firm arrangements for monies for payment to fulfil the obligations under the offerare in place; (d) the public announcement of buy-back is made in terms of the regulations;shares bought back out of free reserves shall be transferred to reserve account to be called the capital buy-back reserve account.provided that the capital buy back reserve account may be applied by the company in paying up un-issuedshares of the company to be issued to members of the company as fully paid bonus shares." (e) the letter of offer has been filed in terms of the regulations; (f) the merchant banker shall furnish to the Board a due diligence certificate whichshall ac company the draft letter of offer; (g) the merchant banker shall ensure that the contents of the public announcementof offer as well as the letter of offer are true, fair and adequate and quoting thesource wherever necessary; (h) the merchant banker shall ensure compliance of section 77A and section 77B ofthe Companies Act, and any other laws or rules as may be applicable in thisregard; (i) upon fulfilment of all obligations by the company under the regulations, themerchant banker shall inform the bank with whom the escrow or special amounthas been deposited to release the balance amount to the company ; (j) the merchant banker shall send a final report to the Board in the form specified |
| 21 (1) The Board may, on failure of the merchant banker to comply with the obligations or failing to observe due diligence initiate action against the merchant banker in terms of the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992. |
| 21 (2) The Board may on the failure of a registrar or a broker to comply with the provisions of these regulations or failing to observe due diligence initiate action against the registrar or the broker in terms of the regulations applicable to such |
| 22 (1) The Board may, suo motu or upon information received by it, cause an investigation to be made in respect of the conduct and affairs of any person associated with the process of buy-back, by appointing an officer of the Board : Provided that no such investigation shall be made except for the purposes specified in sub-regulation (2). |
| 22 (2) The purposes referred to in sub-regulation (1) are the following, namely :- (a) to ascertain whether there are any circumstances which would render anyperson guilty of having contravened any of these regulations or any directionsissued thereunder; (b) to investigate into any complaint of any contravention of the regulation, receivedfrom any investor , intermediary or any other person . |
| 22 (3) An order passed under sub-regulation (1) shall be sufficient authority for the Investigating Officer to undertake the investigation and on production of an authenticated copy of the order, the person concerned shall be bound to carry out |
| 23 (1) It shall be the duty of every person in respect of whom an investigation has been ordered under regulation 22, to produce before the Investigating Officer such books, accounts and other documents in his custody or control and furnish him with such statements and information as the said officer may require from the purposes of the investigation. |
| 23 (2) Without prejudice to the generality of the provisions of sub-regulation (1), such person shall- (a) extend to the Investigating Officer reasonable facilities for examining any books,accounts and other documents in his custody or control (whether kept manuallyor in computer or in any other form) reasonably required for the purposes for theinvestigation; (b) to provide such Investigating Officer with copies of such books, accounts andrecords which, in the opinion of the Investigating Officer, are relevant to theinvestigation or, as the case may be, allow him to take out computer printoutsthereof; (c) to provide such assistance and co-operation as may be required in connectionwith the investigation and furnish information relevant to such investigation asmay be sought by such officer. |
| 23 (3) The Investigating Officer shall for the purpose of investigation, have the full powers :(a) of summoning and enforcing the attendance of persons; (b) to examine orally and to record on oath the statement of the persons concerned ,any director, partner, member or employee of such person. |
| 24 (1) The Investigating Officer shall, on completion of the investigation , after taking into account all relevant facts and circumstances, submit a report to the Board. |
| 24 (2) On the receipt of report under sub-regulation (1), the Board may initiate such action as it may be empowered to do in the interests of investors and the securities market . |
| 25 (1) The Board may in the interests of the securities market and without prejudice to its right to initiate action including criminal prosecution by the Board under section 24 of the Act and give such directions as it deems fit including :(a) directing the person concerned not to further deal in securities in any particularmanner; (b) prohibiting the person concerned from cancelling any of the securities boughtback in violation of the Companies Act; (c) directing the person concerned to sell or divest the 95[shares or other specifiedsecurities] acquired in violation of the provisions of these Regulations or anyother law or regulations; (d) taking action against the intermediaries registered with the Board in accordancewith the Regulations applicable to it; (e) prohibiting the persons concerned, directors, partners, members, employeesand associates of such persons, from accessing the securities market ; (f) disgorgement of any ill-gotten gains or profits or avoidance of loss; (g) restraining the company from making a further offer for buy-back. |
| 25 (2) In case any person is guilty of insider trading or market manipulation the person concerned shall be dealt with in accordance with the provisions of the Securities and Exchange Board of India (Insider Trading) Regulations, 1992. |
| 26 In order to remove any difficulties in the interpretation or application of the provisions of these Regulations, the Board shall have the power to issue directions through guidance notes or circulars : Provided that where any direction is issued by the Board in a specific case relating to interpretation or application of any provision of these Regulations, it shall be done only after affording a reasonable opportunity to the concerned parties and after recording reasons for the direction. |