04-15-2010, 07:27 PM
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Star</i>
<br />Five persons holding 65% shareholding in a listed company want to dispose off all their holdings to general public.
Kindly narrate the procedure and applicable Rules or Regulations or law!!!!!!!!!!!!!!!
Regards,
*
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Dear Star,
In my opinion you should ask this question at "Corporate Governance" forum. Anyhow, if a person/shareholder, who holds more than 10% share of a company, wants to sale his holdings to general public then the provisions of Companies (Issue of Capital)Rules 1996 are applicable on such person under Rule 3 of the said rules .
Rule 9 of Companies (Issue of Capital)Rules 1996 lays down the procedure and legalities in case a person holds more than 10% shares of a listed company wants to sale shares to general public
Rule 9 is as follows
"A person who holds more than ten percent of the shares of a company may offer such shares for sale to the public subject to the following conditions; namely;--
(i) The size of the capital to be offered to public through offer for sale shall not be less than one hundred million rupees or twenty-five per cent of the capital, which ever is less;
(ii) no premium shall be charged unless the company has profitable
operational record for at least one year;
(iii) in case a premium is to be charged on the sale of shares, the offer shall be fully underwritten and the underwriters, not being the associated companies, shall include at least two financial institutions including commercial banks and investment banks and the underwriters shall givefull justification of the amount of premium in their independent due diligence reports.
(iv) due diligence reports of the underwriters shall form part of the materialcontracts and
(v) full justification for the premium shall be disclosed in the offer for sale.
Regards,
Awais Aftab
<br />Five persons holding 65% shareholding in a listed company want to dispose off all their holdings to general public.
Kindly narrate the procedure and applicable Rules or Regulations or law!!!!!!!!!!!!!!!
Regards,
*
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Dear Star,
In my opinion you should ask this question at "Corporate Governance" forum. Anyhow, if a person/shareholder, who holds more than 10% share of a company, wants to sale his holdings to general public then the provisions of Companies (Issue of Capital)Rules 1996 are applicable on such person under Rule 3 of the said rules .
Rule 9 of Companies (Issue of Capital)Rules 1996 lays down the procedure and legalities in case a person holds more than 10% shares of a listed company wants to sale shares to general public
Rule 9 is as follows
"A person who holds more than ten percent of the shares of a company may offer such shares for sale to the public subject to the following conditions; namely;--
(i) The size of the capital to be offered to public through offer for sale shall not be less than one hundred million rupees or twenty-five per cent of the capital, which ever is less;
(ii) no premium shall be charged unless the company has profitable
operational record for at least one year;
(iii) in case a premium is to be charged on the sale of shares, the offer shall be fully underwritten and the underwriters, not being the associated companies, shall include at least two financial institutions including commercial banks and investment banks and the underwriters shall givefull justification of the amount of premium in their independent due diligence reports.
(iv) due diligence reports of the underwriters shall form part of the materialcontracts and
(v) full justification for the premium shall be disclosed in the offer for sale.
Regards,
Awais Aftab
