IPR Update -

IPR Update -

e-filing in IPO India can now be done with digital class II sign also in addition to existing facility with class III sign. Also, Aadhar based e verification will be made available for filing before 31st Jan, 2018!!!

SEBI - Press Release about Curbing misuse of bulk SMS in the Securities Market

"SEBI - PRESS RELEASE ABOUT CURBING MISUSE OF BULK SMS

 IN THE SECURITIES MARKET"

It had come to the notice of the Securities and Exchange Board of India (SEBI) that there are increasing instances of bulk SMSs being sent to investors and the general public inducing them to invest in or purchase the stocks of certain listed companies, indicating target prices and giving fraudulent misleading/false information. SEBI regulation requires that investment advice and stock tips can only be given by Investment Advisors and certain other entities that are duly registered with SEBI. However, the main challenge faced by SEBI in this context, was the lack of reliable information on the identity of senders of such SMSs which created road blocks for SEBI in taking necessary enforcement action against them.

In view of the detrimental effect of fraudulent bulk SMSs on the integrity of markets and confidence of investors, SEBI sought the attention of Telecom Regulatory Authority of India (TRAI) which has been entrusted with regulation of the telecommunication services so as to protect the interest of the consumers of telecommunications service and the public at large. TRAI and SEBI collaborated closely to review the existing regulatory framework and industry practices to help in reducing the vulnerability of securities market to manipulation through misuse of mass communication device like bulk SMS.  TRAI vide its notification no. F. No.311-3/2015-QoS dated August 10, 2017 (link: http://www.trai.gov.in/release-publication/directions) issued directions to all Access Providers to follow certain operational guidelines for SMSs relating to investment advice/stock tips using the bulk SMS channel. SEBI believes that these directions will go a long way to curb the dissemination of fraudulent and misleading information through the bulk SMS channel. 

Link of above said information is given below-

http://www.sebi.gov.in/media/press-releases/aug-2017/curbing-misuse-of-bulk-sms-in-the-securities-market_35642.html

With Regards

CS Prakash Verma

ONLINE REGISTRATION MECHANISM FOR CUSTODIAN OF SECURITIES

 Online Registration Mechanism For Custodian Of Securities

1. Hon'ble Minister of Finance, Government of India, in his speech while presenting the Budget for FY 2017-18 on February 01, 2017, announced that the process of registration of financial market intermediaries will be made fully online by SEBI.

2. It has now been decided to operationalize SEBI Intermediary Portal (https://siportal.sebi.gov.in) for the applicants to submit the applications for registration as a Custodian of Securities under the provisions of SEBI (Custodian of Securities) Regulations, 1996 (hereinafter referred to as ‘Custodian Regulations’) online. Link for SEBI Intermediary Portal is also available on SEBI website - www.sebi.gov.in.

3. All applicants desirous of seeking registration as a Custodian of Securities are now required to submit their applications online only, through SEBI Intermediary Portal at https://siportal.sebi.gov.in. The Custodian of Securities seeking approval as Designated Depository Participant (DDP) in terms of Regulation 11 of SEBI (FPI) Regulations, 2014 shall also apply through this portal. The aforesaid online registration system for Custodians of Securities and approval as DDP has been made operational with immediate effect.

4. In case of any queries and clarifications with regard to the SEBI Intermediary Portal, intermediaries may contact SEBI portal helpline on 022-26449364 or may write at portalhelp@sebi.gov.in.

5. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

6. A copy of this circular is available at the links “Legal - Circulars” on the website www.sebi.gov.in.

With Regards

CS Prakash Verma

DISCLOSURES BY LISTED ENTITIES OF DEFAULTS ON PAYMENT OF INTEREST/ REPAYMENT OF PRINCIPAL AMOUNT ON LOANS FROM BANKS / FINANCIAL INSTITUTIONS, DEBT SECURITIES, ETC

DISCLOSURES BY LISTED ENTITIES OF DEFAULTS ON PAYMENT OF INTEREST/ REPAYMENT OF PRINCIPAL AMOUNT ON LOANS FROM BANKS / FINANCIAL INSTITUTIONS, DEBT SECURITIES, ETC.

INFORMATION:

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR Regulations”) currently require disclosure of material events / information by listed entities to stock exchanges. Specific disclosures are required under the SEBI LODR Regulations in certain matters such as delay / default in payment of interest / principal on debt securities, including listed Non-Convertible Debentures, listed Non-Convertible Redeemable Preference Shares, Foreign Currency Convertible Bonds (FCCBs) etc. Similar disclosures are presently not stipulated with respect to loans from banks and financial institutions.

Corporates in India are even today primarily reliant on loans from the banking sector. Many banks are presently under considerable stress on account of large loans to the corporate sector turning into stressed assets / Non performing Assets (NPAs). Some companies have also been taken up for initiation of insolvency and bankruptcy proceedings.

In order to address this critical gap in the availability of information to investors, listed entities shall comply with the requirements of this circular.

APPLICABILITY:

The circular shall be applicable to all listed entities which have listed any of the following: specified securities (equity and convertible securities), non-convertible debt securities and non-convertible and redeemable preference shares.

The disclosures shall be made to the stock exchanges when the entity has defaulted in payment of interest / instalment obligations on debt securities (including commercial paper), Medium Term Notes (MTNs), Foreign Currency Convertible Bonds (FCCBs), loans from banks and financial institutions, External Commercial Borrowings (ECBs) etc.

‘Default’ for the purpose of this circular shall mean non-payment of interest or principal amount in full on the pre-agreed date.

TIMING OF DISCLOSURES:

The entities shall make disclosures within one working day from the date of default at the first instance of default in the format specified in Clause C1 and within 7 days from the end of such quarter in the format specified in Clause C2 of this circular.

 

OTHER INFORMATION:

Listed entities entity shall also separately provide information pertaining to defaults to the concerned Credit Rating Agencies in a timely manner and as may be specified by SEBI from time to time.

This circular shall come into effect with effect from October 1, 2017. This is to enable listed companies to put appropriate systems in place for prompt submission of disclosures as stipulated in this circular.

Stock Exchanges are advised to bring the provisions of this circular to the notice of listed entities and to disseminate the same on their websites.

This circular is issued under Regulation 101 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

This circular is available on the SEBI website at www.sebi.gov.in under the category “Legal

Framework/Circulars” and link for the same is given below:

http://www.sebi.gov.in/legal/circulars/aug-2017/disclosures-by-listed-entities-of-defaults-on-payment-of-interest-repayment-of-principal-amount-on-loans-from-banks-financial-institutions-debt-securities-etc_35538.html

With Regards

CS Prakash Verma

Action against Exclusively Listed Companies and its Promoters/Directors pending Exit Offer to the Shareholders

Securities and Exchange Board of India - Circular - August 01, 2017

"Action against Exclusively Listed Companies and its Promoters/Directors pending Exit Offer to the Shareholders"

1. SEBI vide circular dated October 10, 2016, provided options to the Exclusively Listed Companies (“ELCs”) on Dissemination Board (“DB”) to raise capital for meeting the capital requirement for getting listed on the nationwide stock exchanges or to provide exit to investors. An exit mechanism for investors in such ELCs was also specified in the aforesaid circular. Further, ELCs were required to furnish the plan of action by January 09, 2017 to the Designated Stock Exchanges (DSEs), which was subsequently extended till June 30, 2017.

2. The aforesaid circular dated October 10, 2016 stipulated the following action against such ELCs, which remain non-compliant with the above timelines:
- The company, its directors, its promoters and the companies which are promoted by any of them shall not directly or indirectly associate with the securities market or seek listing for any equity shares for a period of ten years from the exit from the DB.
- Freezing of shares of the promoters/directors.
- List of the directors, promoters etc. of all non-compliant companies as available from the details of the company with NSE/BSE shall be disseminated on SEBI website and shall also be shared with other related agencies.
- Attachment of bank accounts/other assets of promoters/directors of the companies so as to compensate the investors.

3. In order to ensure that exit option is provided to the public shareholders of ELCs that are non-compliant with the provisions of the said circular dated October 10, 2016 and have not submitted plan of action to the DSEs and in order to protect the interest of investors in ELCs on DB it is hereby directed that, to begin with:-

a. Such ELCs and the Depositories shall not effect transfer, by way of sale, pledge, etc., of any of the equity shares and the corporate benefits such as dividend, rights, bonus shares, split, etc. shall be frozen, for all the equity shares, held by the promoters or directors of non-compliant Exclusively Listed Companies till the promoters of such non-compliant Exclusively Listed Companies provide an exit option to the public shareholders in compliance with SEBI circular dated October 10, 2016, as certified by the concerned Designated Stock Exchanges ;

b. The non-compliant Exclusively Listed Companies, its directors, its promoters and the companies which are promoted by any of them shall not be eligible to access the securities market for the purposes of raising capital till the promoters of such non-compliant Exclusively Listed Companies provide an exit option to the public shareholders in compliance with SEBI circular dated October 10, 2016, as certified by the concerned Designated Stock Exchanges.

c. The promoters or directors of non-compliant Exclusively Listed Companies shall not be eligible to remain or become director of any listed company till the promoters of such non-compliant Exclusively Listed Companies provide an exit option to the public shareholders in compliance with SEBI circular dated October 10, 2016, as certified by the concerned Designated Stock Exchanges.

4. For the aforesaid purposes, “Exclusively Listed Companies” refer to those companies whose equity shares were exclusively listed at a recognised stock exchange at the time of exit of such exchange and were subsequently moved to the Dissemination Board of NSE and BSE and whose shares are available for buying and selling on Dissemination Board.

5. The concerned Designated Stock Exchanges and Depositories shall co-ordinate with each other and ensure compliance of these requirements.

6. SEBI may also take any other appropriate action(s) against the promoters/directors of Exclusively Listed Companies for non-compliance with SEBI circular dated October 10, 2016.

7. This circular is issued in exercise of powers conferred under Section 11 (1) and 11(2) (j) of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. This circular is available on SEBI website at www.sebi.gov.in.

Link of above said circular is given below -

http://www.sebi.gov.in/legal/circulars/aug-2017/action-against-exclusively-listed-companies-and-its-promoters-directors-pending-exit-offer-to-the-shareholders_35498.html

With Regards
CS Prakash Verma

Blow to SpiceJet: Supreme Court rejects carrier’s share transfer dispute plea with Kalanithi Maran

The Supreme Court yesterday dismissed the appeals of budget carrier SpiceJet challenging the Delhi High Court verdict asking it to deposit Rs 579 crore in connection with a share transfer dispute with its previous owner Kalanithi Maran. “We are rejecting (the appeals),” a bench comprising justices R F Nariman and S K Kaul said while upholding the July three judgement of the high court.

The appeals were filed in the apex court by the airline and its co-founder Ajay Singh. A division bench of the high court had asked SpiceJet to deposit the money, saying, “there is nothing worthwhile” in the petitions to show its finances were precarious or that its cash position was so stretched that it could not comply with its single judge order asking it to deposit the amount.

However, the division bench had provided it some relief by allowing it to deposit the amount in two parts. It had said that part of the amount could be secured by a cash deposit of Rs 250 crore and the balance by a bank guarantee of Rs 329 crore. SpiceJet and Singh had challenged before the division bench the July last year’s interim order passed by a single judge alleging that the court did not have the jurisdiction.

The single judge’s order had come on a civil suit by Sun TV group’s chief Kalanithi Maran and his Kal Airways. In their suit, Maran and his airline company had sought issuance of stock warrants in SpiceJet to them as per a sale purchase agreement (SPA) of 2015 which had led to the transfer of ownership of the budget carrier to Ajay Singh.

Maran and Kal Airways had alleged before the single judge that despite giving Rs 579 crore to SpiceJet, the carrier had failed to issue them the warrants or allot tranche one and two of convertible redeemable preference shares and that the amount was not utilised for paying statutory dues for which they were also facing prosecution.

Apart from ordering that the amount be deposited in the court, the single judge had also asked Spicejet and Maran to appoint an “arbitral tribunal” to decide the share transfer dispute between them in a year. The amount was to be deposited in five instalments with the first one in August 2016, the court had said.

Market regulator SEBI had earlier expressed its inability before the high court to approve the board resolution passed by SpiceJet for issue of warrants in favour of Maran and his Kal Airways. The board resolution was passed on the court’s direction.

Under the SPA, Maran and Kal Airways had transferred their entire 350,428,758 equity shares (58.46 per cent stake) in the airline to Ajay Singh. According to the SPA, Maran and Kal were to receive the redeemable warrants in return for the amount they were to give to the airline towards operating costs and debt payment, Maran had said in his plea.

SpiceJet had earlier told the high court that the change of ownership was effected as a rehabilitative measure to address the liability of Rs 2,000 crore incurred by the airline when it was under the management of Maran. It had also claimed that every penny had been utilised towards operations and discharge of liabilities.

Source of above information -

http://www.financialexpress.com/industry/blow-to-spicejet-supreme-court-rejects-carriers-share-transfer-dispute-plea-with-kalanithi-maran/784584/

With Regards
CS Prakash Verma