Regulation 38A - Delisting of equity shares of a listed investment holding company pursuant to a scheme of arrangement - Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021.

1 [PART-E SPECIAL PROVISIONS FOR DELISTING OF INVESTMENT HOLDING COMPANY Delisting of equity shares of a listed investment holding company pursuant to a scheme of arrangement 38A (1) Nothing contained in these regulations shall apply to the delisting of equity shares of an investment holding company, pursuant to a scheme of arrangement by an order of a Court or Tribunal. (2) Delisting of equity shares made under sub-regulation (1) shall be undertaken, in the following manneri. i. the listed investment holding company shall transfer the equity shares (value as calculated on a net of pro-rata liabilities) held by it in other listed companies, to its public shareholders in proportion to their shareholding; ii. the listed investment holding company shall make payment in cash (value as calculated on a net of pro-rata liabilities) in exchange for the underlying shares or investments made by such investment holding company in unlisted companies and other assets, if any, to its public shareholders in proportion to their shareholding; iii. public shareholding of the listed investment holding company shall be extinguished upon transfer of the underlying shares mentioned at (i) and payment in cash mentioned at (ii), pursuant to a scheme for selective reduction of capital under Section 66 of the Companies Act, 2013, as amended from time to time; and iv. the listed investment holding company shall apply to the stock exchanges for delisting. (3) The delisting of the equity shares of an investment holding company in terms of sub-regulation (1) shall be permitted, subject to the fulfilment of the following conditions :- i. the listed investment holding company shall have not less than seventy-five percent of its fair value comprising direct investments in equity shares of other listed companies; Explanation: The fair value (net of liabilities) of the listed investment holding company shall be determined pursuant to a joint report by two independent registered valuers, which, inter-alia, shall include a) value of investments of frequently traded shares of listed companies based on sixty trading days volume weighted average market price; b) fair value of investments of infrequently traded shares of listed companies and unlisted companies; and c) fair value of other assets of the listed investment holding company. ii. the listed investment holding company shall comply with regulations 11, 37 and 94 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Circulars issued thereunder; iii. there shall be e-voting by shareholders of such listed investment holding company wherein votes cast by public shareholders of the listed investment holding company in favour of the proposal are not less than two times the number of votes cast against it; iv. the material disclosures in relation to calculation of the entitlement ratio and per share consideration is included in the explanatory statement of the notice for the shareholders meeting; v. the joint valuation report obtained by two independent registered valuers shall be submitted to the stock exchanges along with draft scheme for disclosure to public; vi. the report from a chartered accountant or merchant banker confirming the entitlement ratio is obtained; vii. the shares of the listed investment holding company shall have been listed for not less than 3 years and shall not be suspended at the time of taking this route; viii. no adverse orders have been passed by the Board against the listed investment holding company and their promoters or promoter group in the last three years; and ix. the equity shares of the listed investment holding company so delisted, shall not be permitted to seek relisting for a period of three years from the date of delisting: Provided that such relisting shall be in terms of sub-regulation (3) and (4) of regulation 40 of these regulations. (4) The delisting of the equity shares of an investment holding company shall also be subject to the compliance with any requirement specified by any financial sector regulator with whom such investment holding company is regulated. ] *************** NOTES:- 1. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/206 dated 25-09-2024 w.e.f. (For Additional Condition See this Notification )