Mumbai : Capital markets regulator Sebi is planning to put in place new norms mandating listed companies to provide an exit option to dissenting shareholders in case of changes to the objectives for which they had raised money from investors.
The move would help shareholders make an exit if they feel dissatisfied with any change in business plan of the concerned company after raising funds through IPOs, FPOs or any other capital-raising exercise involving public investors, a senior official said.
The Securities and Exchange Board of India’s (Sebi) proposed move follows a provision in the Companies Act, 2013 in this regard. These provisions also stipulate that such an exit option needs to be given as per the regulations to be specified by Sebi. Accordingly, the capital markets regulator has decided to put in place a suitable regulatory framework.
As part of efforts to protect the interests of investors and prevent them from falling prey to dubious investment schemes, the new companies law provides for various provisions. One of the provision is with regard to altering the purpose of raising money from investors once such funds have been garnered by a company.
Under the Companies Act, 2013, changes in memorandum of a firm — as mentioned prior to raising funds — can be amended only by way of a special resolution passed by the concerned shareholders.
