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Can Lock in Period Shares be Plegded

Bhawna Upadhyay (Power Industry) (87 Points)

06 October 2009

If a company's promoters wants to pledge its shares which are In LOCK IN PERIOD, does they can do this ?

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6 Replies

PRAVEEN KUMAR (MBA (Finance) B.Com.(P)) (3443 Points)
Replied 06 October 2009

i don't think so because purpose of the lock-in is to ensure that promoters do not get unearned gains arising from transaction in stakes, any loopholes that will allow owners to pledge their shares amount to diluting the lock-in condition. so they cannot pledge the lock in shares.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 06 October 2009

Hi,

Locked-in shares can 100% be pledged.

Locked-in shares can be pledged with a Lender (such as a Bank) for a loan. However, the pledge cannot be closed or invoked before the lock-in release date.

You have to provide the details of pledged shares in balance sheet, shareholding pattern and everywhere else as desired by stock exchange.

Regards

(Guest)

Agree with Mr. Ankur.

Lock-in period is given so, that promoters do not sell their shares. But, If they require mony or they simply want extra money then they can pledge shares.