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TMI BlogConditions for re-classification of any person as promoter / publicX X X X Extracts X X X X X X X X Extracts X X X X ..... tions specified in these regulations; Provided that in case of entities listed on more than one stock exchange, the concerned stock exchanges shall jointly decide on the application. 2 [ (3) Reclassification of status of a promoter to public shall be permitted by the stock exchanges only upon satisfaction of the following conditions: (a) an application for reclassification has been made by the listed entity to the stock exchanges within thirty days from the date of approval by shareholders in general meeting after ensuring that the following procedural requirements have been fulfilled: (i) the promoter(s) seeking reclassification has made a request for reclassification to the listed entity along with a rationale for the same and a description as to how the conditions specified in clause (b) of sub-regulation (3) of this regulation are satisfied; (ii) the board of directors of the listed entity has analyzed such request in the immediately next board meeting or within three months from the date of receipt of the request from its promoter(s), whichever is earlier and has placed the same before the shareholders in a general meeting for approval along with the views of the board of dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] shall comply with conditions mentioned at sub-clauses (iv) and (v) of clause (b) of sub-regulation 3 for a period of not less than three years from the date of such re-classification failing which, he 4 [ /she ] shall automatically be reclassified as promoter/ persons belonging to promoter group, as applicable. (5) If any public shareholder seeks to re-classify itself as promoter, it shall be required to make an open offer in accordance with the provisions of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. (6) In case of transmission, succession, inheritance and gift of shares held by a promoter/ person belonging to the promoter group: (a) immediately on such event, the recipient of such shares shall be classified as a promoter/ person belonging to the promoter group, as applicable. (b) subsequently, in case the recipient classified as a promoter/person belonging to the promoter group proposes to seek re-classification of status as public, it may do so subject to compliance with conditions specified in sub-regulation (3) above. (c) in case of death of a promoter/person belonging to the promoter group, such person shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the formats specified by SEBI. (2) The stock exchange, specified in sub-regulation (1), shall allow modification or reclassification of the status of the shareholders, only upon receipt of a request from the concerned listed entity or the concerned shareholders along with all relevant evidence and on being satisfied with the compliance of conditions mentioned in this regulation. (3) In case of entities listed on more than one stock exchange, the concerned stock exchanges shall jointly decide on the application of the entity/ shareholders, as specified in sub-regulation(2). (4) In case of transmission/succession/inheritance, the inheritor shall be classified as promoter. (5) When a new promoter replaces the previous promoter subsequent to an open offer or in any other manner, re-classification may be permitted subject to approval of shareholders in the general meeting and compliance of the following conditions: (a) Such promoter along with the promoter group and the Persons Acting in Concert shall not hold more than ten per cent of the paid-up equity capital of the entity. (b) Such promoter shall not continue to have any special rights through formal or informal arrangements. All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordance with the provisions of these regulations. (d) Board may relax any condition for re-classification in specific cases, if it is satisfied about non-exercise of control by the outgoing promoter or its persons acting in concert. (8) If any public shareholder seeks to re-classify itself as promoter, it shall be required to make an open offer in accordance with the provisions of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. (9) The provisions of sub-regulations (5), (6) and clause (b) of sub regulation (7) of this regulation shall not apply, if re-classification of existing promoter or promoter group of the listed entity is as per the resolution plan approved under section 31 of the Insolvency Code, subject to the following conditions: (i) the existing promoter and promoter group seeking re-classification shall not remain in control of the listed entity; and (ii) such re-classification along with the underlying rationale shall be disclosed to the stock exchanges within one day of the resolution plan being approved. 2. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/22 dated 05-05-2021 before it was read as (3) Re-classification of status of a p ..... 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