Limit on preferentual allotment for Promoter/Director

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RItu (Querist)
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05 November 2007 When the company goes for preferential allotment is there any limit or percentage upto which a promoter/director of the company can subscribe to the shares

R.V.RAO

R.V.RAO (Expert)
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05 November 2007 IN A LISTED COMPANY AS PER SEBI AND STOCK EXCHANGE REGULATIONS, THE MINIMUM PUBLIC HOLDING SHOULD NOT FALL BELOW WHAT IT WAS AT PUBLIC ISSUE TIME.
FOR EXAMPLE IF THE PUBLIC HOLDING IS 25% AT THE TIME OF PUBLIC ISSUE , ENSURE NOW ALSO SAME % OF PUBLIC HOLDING SHOULD CONTINUE.
ONCE THIS RULE IS COMPLIED, THERE IS NO RESTRICTION ABOUT ALLOTMENT TO PROMOTER GROUP,EXCEPT THAT A LISTED COMPANY SHOULD FIRST GET IN PRINCILE APPROVAL OF STOCK EXCHANGES BEFORE ANY PREF. ALLOTMENT.
A COMPANY SHOULD PASS RESOLUTION UNDER SEC 81(1)(A), BEFORE ANY PREFERENTIAL ALLOTMENT .
AN UNLISTED COMPANY SHOULD FOLLOW THE UNLISTED COMPANIES PREFERENTIAL ALLOT MENT RULES/GUIDELINES
EVEN THOSE RULES DO NOT STIPULATE ANY RESTRICTION ON ALLOTMENT TO PROPMOTER GROUP EXCEPT AS STATED ABOVE.
R.V.RAO

kumar arumugam

kumar arumugam (Expert)
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06 November 2007 thanks Rao Sir

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