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Provision of Escrow.

..... ON OF SHARES AND TAKEOVERS) REGULATIONS, 1997 - Regulation 28 - 28. (1) The acquirer shall as and by way of security for performance of his obligations under the regulations, deposit in an escrow account such sum as specified in sub-regulation (2). (2) The escrow amount shall be calculated in the following manner,- (a) For consideration payable under the public offer,- up to and including ₹ 100 crores 25 per cent; exceeding ₹ 100 crores 25 per cent; up to ₹ 100 crores and 10 per cent thereafter. (b) For offers which are subject to a minimum level of acceptance, and the acquirer does not want to acquire a minimum of 20 per cent, than 50 per cent of the consideration payable under the public offer in cash shall be deposited .....

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..... n of the value of the securities, the merchant banker shall be liable to make good any such deficit. (8) In case the escrow account consists of bank guarantee or approved securities, these shall not be returned by the merchant banker till after completion of all obligations under the regulations. (9) In case there is any upward revision of offer, consequent upon a competitive bid or otherwise, the value of the escrow account shall be increased to equal at least 10 per cent of the consideration payable upon such revision. (10) Where the escrow account consists of bank guarantee or deposit of approved securities, the acquirer shall also deposit with the bank a sum of at least 1 per cent of the total consideration payable, as and by way of sec .....

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..... ent of any of the obligations under the Regulations, for distribution in the following manner, after deduction of expenses, if any, of the merchant banker and the registrars to the offer, - (i) one third of the amount to the target company; (ii) one third of the amount to the Investor Protection and Education Fund established by the Board; (iii) one third of the amount to be distributed pro-rata among the shareholders who have accepted the offer. (13) In the event of non-fulfilment of obligations by the acquirer, the merchant banker shall ensure realisation of escrow amount by way of foreclosure of deposit invocation of bank guarantee or sale of securities and credit proceeds thereof 5[to the Investor Protection and Education Fund establish .....

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