Clarification on dispatch of notice under section 62(2) of Companies Act, 2013 by listed companies for rights issue opening upto 31st July, 2020

Last updated: 12 May 2020

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This notification clarifies the dispatch of notices for rights issues by listed companies under the Companies Act, 2013. Due to difficulties with postal services caused by COVID-19, companies opening rights issues up to 31st July 2020 will not be considered in violation of Section 62(2) if they cannot send notices via post or courier, provided they comply with the SEBI Circular dated 6th May 2020.

General Circular No. 21/2020

F. No. 2/4/2020-CL-V
Government of India
Ministry of Corporate Affairs

5^thFloor, ‘A’ Wing, Shastri Bhawan,
Dr. R. P. Road, New Delhi-110001
Dated: 11^th May, 2020

All Regional Directors,

All Registrar of Companies

All Stakeholders

Subject: Clarification on dispatch of notice under section 62(2) of Companies Act, 2013 by listed companies for rights issue opening upto 31^st July, 2020

Sir/Madam,

Several representations have been received in the Ministry for providing clarification on the mode of issue of notice referred to in section 62(1)(a)(i) of Companies Act (the ‘Act) read with section 62(2) of the Act for rights issue by listed companies, in view of the difficulties faced by companies in sending notices through postal or courier services on account of the threat posed by Covid-19. The issues raised in the said representations have been examined. The Circular (Number SEBI/HO/CFD/DIL2/CIR/P/2020/78) issued by SEBI on 6^thMay, 2020 has also been considered.

2. In view of above and on account of the overall situation, it is hereby clarified that for rights issues opening upto 31^stJuly, 2020, in case of listed companies, which comply with the aforementioned SEBI Circular dated 6^thMay 2020, inability to dispatch the notice referred in para 1 of this Circular to their shareholders through registered post or speed post or courier would not be viewed as violation of section 62(2) of the Act.

3. This issues with the approval of the competent authority.

Yours faithfully

(Atma Sah)
Deputy Director

Copy to:-1. e-Governance Section and Web Contents Officer for placing this circular on the Ministry’s website

2. Guard File

FAQ :

This notification clarifies the rules for listed companies sending out notices for rights issues, specifically regarding difficulties in postal delivery due to COVID-19.

The clarification pertains to Section 62(2) of the Companies Act, 2013, concerning the dispatch of notices for rights issues.

This clarification applies to rights issues opening up to 31st July 2020.

If a listed company complies with the SEBI Circular dated 6th May 2020, its inability to dispatch notices via registered post, speed post, or courier will not be seen as a violation of Section 62(2) of the Act.

The SEBI Circular (Number SEBI/HO/CFD/DIL2/CIR/P/2020/78) issued on 6th May 2020 was considered.