In a consultation paper, SEBI has proposed several changes to Regulation 31A of the LODR Regulations pertaining to the reclassification of promoter and promoter group entities, basis concerns raised by stakeholders with respect to implementation of the extant provisions. Instead of granting a case to case relaxation, SEBI has suggested changes that would pre-empt/minimise that need and facilitate ease of implementation. Public comments have been invited to the proposed changes by 24 December 2020.
The changes suggested by SEBI are as follows:
Exemption from the procedure for re-classification, may be granted in cases where, pursuant to an open offer, a listed entity intends to re-classify erstwhile promoter(s)/ promoter group entities but the ‘promoters/ promoter group entities’ are not traceable or are not co-operative. However, the listed entity should be able to demonstrate that efforts have been taken to contact the promoter(s) such as through issuance of notices in newspapers, Stock Exchange websites, etc.; and provided such promoter(s) seeking re-classification shall not remain in control of the listed entity;
To refer to the Consultation paper dated 23 November 2020, click here.
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