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SECURITIES AND EXCHANGE BOARD OF INDIA (DELISTING OF SECURITIES) GUIDELINES - 2003

..... ties) Guidelines 2003 . 2. These guidelines are being issued under section 11(1) of SEBI Act, 1992, read with sub-section (2) of Section 11A of SEBI Act, with the objective to protect the interest of investors in the securities market. 3. DEFINITIONS 3.1 In these Guidelines, unless the context otherwise requires:- (a) Act means the Securities and Exchange Board of India Act, 1992; (b) Authority means the Central Listing Authority established under the Securities and Exchange Board of India (Central Listing Authority) Regulations, 2003. (c) Board means the Securities and Exchange Board of India established under section 3 of the Act; (d) compulsory delisting means delisting of the securities of a company by an exchange. (e) delisting exchange means the exchange from which the securities of the company are proposed to be delisted in accordance with these Guidelines; (f) exchange means any stock exchange which has been granted recognition under section 4 of the Securities Contracts (Regulation) Act, 1956; (g) promoter means a 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 Take .....

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..... k exchange. Provided further that an exit opportunity has been given to the investors for the purpose of which an exit price shall be determined in accordance with the book building process described in clauses 7-10 and 13 and 14 of these guidelines. 5.2 An exit opportunity need not be given in cases where securities continue to be listed in a stock exchange having nation wide trading terminals. Explanation: For the purposes of these guidelines, stock exchange having nationwide trading terminals means the Stock Exchange, Mumbai, the National Stock Exchange and any other stock exchange, which may be specified by the Board. 6. PROCEDURE FOR VOLUNTARY DELISTING 6.1 Any promoter or acquirer desirous of delisting securities of the company under the provisions of these guidelines shall : - (a) obtain the prior approval of shareholders of the company by a special resolution passed at its general meeting; (b) make a public announcement in the manner provided in these Guidelines. (c) make an application to the delisting exchange in the form specified by the exchange, annexing therewith a copy of the special resolution passed under sub-clause (a); and; (d) comply with such other additional c .....

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..... of public holding for continuous listing, the company shall remain listed. 8.9 The paid up share capital shall not be extinguished as in the case of buyback of securities; 8.10 In case of partly paid-up securities, the price determined by the book building process shall be applicable to the extent the call has been made and paid. 8.11 The amount of consideration for the tendered and acceped securities shall be settled in cash; 9. RIGHT OF PROMOTER 9.1 The promoter may not accept the securities at the offer price determined by the book building process. 9.2 Where the promoter decides not to accept the offer price so determined: (a) he shall not make an application to the exchange for delisting of the securities; and (b) the promoter shall ensure that the public shareholding is brought up to the minimum limits specified under the listing conditions within a period of 6 months from the date of such decision, by any of the modes specified in sub-clause 9.3. 9.3 For the purposes of sub-clause 9.2(b), the public shareholding may be increased by any of the following means: (a) by issue of new shares by the company in compliance with the provisions of the Companies Act, 1956 and the Securi .....

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..... ES 14.1 A company may delist one or all of its class of securities subject to the provisions of this clause. 14.2 If the equity shares of a company are delisted, the fixed income securities may continue to remain listed on the stock exchange. 14.3 A company which has a convertible instrument outstanding, it shall not be permitted to delist its equity shares till the exercise of the conversion options. 15. COMPULSORY DELISTING OF COMPANIES BY STOCK EXCHANGES 15.1 The Stock Exchanges may delist companies which have been suspended for a minimum period of six months for non-compliance with the Listing Agreement. 15.2 The Stock Exchanges may also delist companies as per the norms provided in Schedule III. 15.3 The Stock Exchange shall give adequate and wide public notice through news papers ( including one English national daily of wide circulation) and through display of the notice on the notice board/ website/ trading systems of the Exchange. 15.4 The stock exchange shall give a show cause notice to a company or adopt procedure provided under Part B of Schedule III for delisting under sub-clause 15.1 and 15.2. 15.5 The exchange shall provide a time period of 15 days within which repre .....

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..... iding an exit opportunity in the manner specified in clause 17.1 of these guidelines or may be required to make offer for sale of their holdings so that the public shareholding is raised to the minimum level specified in the listing agreement or in the listing conditions within a period of 3 months. 18. REINSTATEMENT OF DELISTED SECURITIES 18.1 Reinstatement of delisted securities should be permitted by the stock exchanges with a cooling period of 2 years. In other words, relisting of securities should be allowed only after 2 years of delisting of the securities. It would be based on the respective norms/criteria for listing at the time of making the application for listing and the application will be initially scrutinized by the Central Listing Authority. ****** 1 Substituted by amendment vide circular dated January 31, 2006. The earlier clause read as - 15.6 The stock exchange shall ensure that adequate and wide public notice is given through newspapers and on the notice boards/trading systems of the stock exchanges after the period of show cause is over. 2 Substituted by amendment vide circular dated January 31, 2006. The earlier clause read as - Explanation: For the purposes of .....

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