SEBI issues discussion Paper on Review of policy relating to forfeiture of partly paid-up shares
SEBI has released a discussion Paper on “Review of policy relating to forfeiture of partly paid-up shares – Amendments to SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011”. It states that forfeiture of shares is a process specified under Table-F (Articles of Association of a Company Limited by Shares) of Schedule I of the Companies Act, 2013. The standard procedure to be followed in case of forfeiture of partly paid-up shares is as follows:
· If a member fails to pay any call, or instalment of a call, on the day appointed for payment, the Board of Directors of the company may, at any time thereafter during such time as any part of the call or instalment remains unpaid, serve a notice on him requiring payment of such amount, together with any interest which may have accrued.
· If the requirements of any such notice are not complied with, any share in respect of which the notice has been given may be forfeited by a resolution of the Board of Directors of the company
Need for regulatory amendment
· Regulation 10 of the Takeover Regulations, 2011 provides general exemption from the obligations to make an open offer for certain acquisitions, subject to fulfilment of the conditions specified therein.
· Increase in voting rights arising out of actions undertaken by the companies under the Companies Act, 2013 such as rights issues, buybacks and schemes of arrangement are exempt from the open offer obligations under regulation 10 of the Takeover Regulations, 2011
· Further, accrual of voting rights on preference shares where dividend has not been paid for two years or more as per sub-section (2) of section 47 of the Companies Act, 2013 are exempt from the open offer obligations under regulation 10 of the Takeover Regulations, 2011.
· Currently, there is no provision for increase in the voting rights of a shareholder due to the expiry of call notice period and forfeiture of partly paid-up shares to be exempt under regulation 10 of the Takeover Regulations, 2011 and an application needs to be filed with SEBI for seeking exemption from the open offer obligations in this regard under regulation 11 of the Takeover Regulations, 2011.
· It may be noted that the facts of these cases with respect to these applications are quite similar. However, a reasoned order must be passed by SEBI in each such case which may take enormous amount of time and effort.
· Further, increase in the voting rights of a shareholder due to the expiry of call notice period and forfeiture of partly paid-up shares is undertaken under the Companies Act, 2013 and is passive in nature
· Therefore, it is proposed by SEBI that the Takeover Regulations, 2011 may be amended suitably for providing general exemption from the open offer obligations in the cases of increase in voting rights as a result of the expiry of call notice period and the forfeiture of shares in line with general exemptions available with respect to rights issues, buybacks etc
Proposed Amendment —Accordingly, it is proposed to insert the following as clause (j) under sub-regulation (1) of regulation 10 of the Takeover Regulations, 2011: “Increase in voting rights arising out of the operation of sub-section (1) of section 106 of the Companies Act, 2013 or pursuant to forfeiture of shares by a company undertaken in compliance with the provisions of the Companies Act, 2013 and articles of association of the company.”
Considering the implications of the said matter on the market participants including listed companies, promoters/promoter group of the said companies and investors, public comments on the amendment proposed above are solicited by SEBI. You may kindly send your suggestions (if any) at surbhi@phdcci.in/sunitag@phdcci.in latest by 15th September 2015.
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29 August 2015
UNIC/PRESS RELEASE/147-2015
STATEMENT FROM THE UN SECRETARY-GENERAL
Lamenting recent migrant/refugee deaths, UN Secretary-General Ban Ki-moon appeals to governments for bolstered efforts ahead of global meeting:
I am horrified and heartbroken at the latest loss of lives of refugees and migrants in the Mediterranean and Europe. Yesterday saw the grim discovery of the bodies of more than 70 people inside a truck abandoned near the Austrian border with Hungary. Reports indicate that many of the victims were Syrian asylum seekers — including children.
Recent days have brought yet more news of hundreds of refugees and migrants drowning in perilous journeys on the sea. Earlier this year, I visited search and rescue operations in the Mediterranean. Despite the concerted and commendable efforts of the joint European search and rescue operation, which has saved tens of thousands of lives, the Mediterranean Sea continues to be a death trap for refugees and migrants.
These repeated tragedies underscore the ruthlessness of people smugglers and traffickers whose criminal activities extend from the Andaman Sea to the Mediterranean to the highways of Europe. It also highlights the desperation of people seeking protection or a new life.
A large majority of people undertaking these arduous and dangerous journeys are refugees fleeing from places such as Syria, Iraq and Afghanistan. International law has stipulated — and States have long recognized — the right of refugees to protection and asylum. When considering asylum requests, States cannot make distinctions based on religion or other identity nor can they force people to return to places from which they have fled if there is a well-founded fear of persecution or attack. This is not only a matter of international law; it is also our duty as human beings.
I commend those leaders and communities who have stepped up to our shared responsibilities and obligations. But much more is required. I appeal to all Governments involved to provide comprehensive responses, expand safe and legal channels of migration and act with humanity, compassion and in accordance with their international obligations.
Let us also remember: the high number of refugees and migrants are a symptom of deeper problems — endless conflict, grave violations of human rights, tangible governance failures and harsh repression. The Syrian war, for example, has just been manifested on a roadside in the heart of Europe.
In addition to upholding responsibilities, the international community must also show greater determination in resolving conflicts and other problems that leave people little choice but to flee. Failing that, the numbers of those displaced — more than 40,000 per day — will only rise.
This is a human tragedy that requires a determined collective political response. It is a crisis of solidarity, not a crisis of numbers. I am encouraged that these issues will be an area of focus and priority when world leaders gather at the United Nations Headquarters in New York next month for the opening of the General Assembly. I am organizing a special meeting devoted to these global concerns on 30 September.
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RAJIV CHANDRAN
National Information Officer
United Nations Information Centre
for India and Bhutan
55, Lodi Estate, New Delhi 110003
Tel: 91 11 2462 3439
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