Regulation 159 - Convertible debt instruments - Securities And Exchange Board of India (Issue Of Capital And Disclosure Requirements) Regulations, 2018

PART I: ISSUERS INELIGIBLE TO MAKE A PREFERENTIAL ISSUE 159. (1) Preferential issue of specified securities shall not be made to any person who has sold or transferred any equity shares of the issuer during the 1 [ 90 trading days ] preceding the relevant date: Provided that in respect of the preferential issue of equity shares and compulsorily convertible debt instruments, whether fully or partly, the Board may grant relaxation from the requirements of this sub-regulation, if the Board has granted relaxation in terms of sub-regulation (2) of regulation 11 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 to such a preferential allotment. Explanation: Where any person belonging to promoter(s) or the promoter group has sold/ transferred their equity shares in the issuer during the 2 [ 90 trading days ] preceding the relevant date, the promoter(s) and promoter group shall be ineligible for allotment of specified securities on preferential basis. Provided that the above restriction shall not apply to any sale of equity shares by any person belonging to promoter(s) of the promoter group which qualifies for inter-se transfer amongst qualifying persons under clause (a) of sub-regulation (1) of regulation 10 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover Regulations), 2011 or in case of transfer of shares held by the promoters or promoter group on account of invocation of pledge by a scheduled commercial bank or public financial institution or a systemically important non- banking finance company or mutual fund or insurance company registered with the Insurance Regulatory and Development Authority. (2) Where any person belonging to promoter(s) or the promoter group has previously subscribed to warrants of an issuer but has failed to exercise the warrants, the promoter(s) and promoter group shall be ineligible for issue of specified securities of such issuer on preferential basis for a period of one year from: a) the date of expiry of the tenure of the warrants due to non-exercise of the option to convert; or b) the date of cancellation of the warrants, as the case may be. (3) An issuer shall not be eligible to make a preferential issue if any of its promoters or directors is a fugitive economic offender. 3 [ (4) An issuer shall not be eligible to make a preferential issue if it has any outstanding dues to the Board, the stock exchanges or the depositories: Provided that sub-regulation (4) shall not be applicable in a case where such outstanding dues are the subject matter of a pending appeal or proceeding(s), which has been admitted by the relevant Court, Tribunal or Authority, as the case may be. ] ************ NOTES:- 1. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as six months 2. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022 before it was read as six months 3. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2022/ 63 dated 14-01-2022