If by virtue of a preferential allotment the paid up capital of company increases from Rs. 100 to Rs. 200 and the percentage of holding of promoter and public remain same, would an open offer is required. Pls mind, it is not a rights issue but a preferntial allotment.
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Reg. 11(2) of SAST
Replies (1)
U will have to give PA, i am presenting below few lines from SEBI website which is in support of my reply:-
Clarificatory circular regarding applicability of Regulation 11 (2) of SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 1997
Background
1. A Board Memorandum No. 95 / 2008 dated October 27, 2008, proposing amendment to the provisions relating to consolidation of holdings by persons holding more than 55 % of shares or voting rights of a company, was circulated to the Board for consideration.
2. The aforesaid Memorandum contained the following proposals –
a. Creeping acquisition upto 5 % may also be allowed to persons holding above 55 % but below 75 % subject to the condition that such acquisition can only be via open market purchases in the normal segment and that no consolidation via bulk / block / negotiated deal or through preferential allotment would be permitted.
b. Such increase upto 5 % per annum may also be allowed if it is a result of buy back by a company.
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