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TMI Blog2018 (12) TMI 1685X X X X Extracts X X X X X X X X Extracts X X X X ..... ted on a derecognised stock exchange were required to be listed on the Nation-wide Stock Exchange on or before the exit of the derecognised stock exchange. And, second, the provisions of sub-paragraph (v) of paragraph 3 of the Circular dated 22.05.2014 has to be read in conjunction with sub-paragraph (i) of paragraph 3 of that Circular; which means that the listing must be on a Nation-wide Stock Exchange. Admittedly, CSE is not one such Stock Exchange. However, it is not necessary to examine this issue any further, in view of the events that have transpired subsequent to the filing of the present petitions. On 20.03.2018, the learned ASG appeared for SEBI and made a statement that BNL was one of the 63 companies, which was listed on CSE which has now been re-transferred to the Dissemination Board of BSE/NSE and therefore, the petitioners grievance would not survive. BNL had not opted for any of the two options as mentioned in the letter dated 10.08.2018 and, therefore, is required to be transferred to the Dissemination Board. In view of the above, the principal grievance of the petitioners does not survive. This is so because the petitioners challenge to SEBI s clarificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f BSE. 3. All the above petitions raise similar issues and the prayers made are similarly worded. The prayers made in W.P. (C) No. 9846/2017 are set out below:- ( i) Issue Writ of Mandamus and/or Certiorari or any other appropriate Writ for quashing and/or setting aside the clarification document dated 06.04.2017 issued by Respondent No. 1; ( ii) pass order declaring the removal of Respondent No. 2 from the Dissemination Board of BSE as illegal and void; ( iii) pass an order directing the Respondent No.l to remove the listing of Respondent no. 2 from CSE as the same was not in accordance to exit circular; iv. pass an order directing the Respondent No. 1 to bring back the Respondent No. 2 in Dissemination Board: pass an order directing the Respondent No. 1 to ensure Respondent No. 2 and/or direct Respondent No. 2to either list itself on stock exchange bearing Nationwide Trading Terminal or to provide exit route to the Petitioner as per the circulars issued by Respondent no. 1; vi. pass orders directing Respondent No. 1 and Respondent No. 2 to follow the guide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dissemination Board on its website. Features of Dissemination Board ; i. Exiting Stock Exchanges will be required to enter into an agreement with at least one of the stock exchanges with nationwide trading terminals providing the Dissemination Board. The exiting stock exchange shall pay a one-time fee for the arrangement as may be decided in the agreement. The fee may be based on number of companies moving on to the dissemination board, number of public shareholders in those companies, their paid up capital etc. ii. Exchanges having nationwide trading terminal will not have listing agreement with these companies. However, information received from such companies will be disseminated. iii. The buyers/ sellers will be required to register with broker of the exchange where the dissemination board is set up. iv. No contract note is required to be issued for such transactions. v. The matched trades will not be settled through the stock exchange/Clearing Corporation mechanism and hence, there will be no recourse to the Settlement/ Trade Guarantee Fund and Investor Protect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esire, it is clarified that for such companies as referred to at Para 2(ii) above, the requirements of 'Minimum Public Shareholding' prescribed in Rules 19(2)(b) and 19A of the Securities Contracts (Regulation) Rules, 1957 and Clause 40A of the Listing Agreement, shall not be applicable. iv. In case of companies exclusively listed in the nonoperational stock exchanges that are not traceable or where the data available is more than three years old, the process of inclusion in list of companies identified, as 'Vanishing' (maintained by Ministry of Corporate Affairs) may be initiated by the respective stock exchanges. v. As per the 'Exit Circular' the exclusively listed companies, which fail to obtain listing on any other stock exchange, which do not voluntary delist or which are not considered as 'Vanishing companies', will cease to be listed company and will be moved to the dissemination board by the existing stock exchange. It shall be the responsibility of the exchanges which are being derecognized either on voluntary or compulsory basis, to place their exclusively listed companies on the dissemination board. Thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanism shall provide exit to its investors as per para 4.d of the circular. d. Procedure to provide exit to investors: In order to protect the interest of all shareholders of such ELCs, an exit mechanism to investors of such ELCs shall be as prescribed in Annexure-A to this circular. Accordingly, all ELCs shall be required to ensure compliance with the procedure for exit. The oversight and monitoring of such exit mechanism shall be carried out by the designated stock exchange. i. Designated stock exchanges shall further ensure that the promoters have made adequate efforts in terms of the above provisions for providing exit to their shareholders before removing ELCs from the DB. ii. The designated stock exchange shall display the list of companies willing to provide exit to their investors on their website on a monthly basis. 10. The principal controversy raised in the present petition relates to compliance with the aforesaid Circular dated 22.05.2014 and 10.10.2016. 11. The relevant facts necessary to appreciate the controversy are briefly stated as under: 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not necessary to examine this issue any further, in view of the events that have transpired subsequent to the filing of the present petitions. 15. On 20.03.2018, the learned ASG appeared for SEBI and made a statement that BNL was one of the 63 companies, which was listed on CSE which has now been re-transferred to the Dissemination Board of BSE/NSE and therefore, the petitioners grievance would not survive. In view of the above, SEBI was directed to file an affidavit in this regard. In compliance with the said order, SEBI has filed a compliance report, inter alia , affirming as under:- 1. SEBI/Respondent No.1 vide letter dated January 12, 2018 inter-alia advised Calcutta Stock Exchange (CSE) to immediately ensure: ( a) Transfer of all the 63 companies (including Bharat Nidhi Ltd. - Respondent no. 2) which have got itself listed on CSE from the date it became nonoperational till date, to the Dissemination Board of BSE/NSE and refrain from listing any company till the matter of compulsory exit is sub-judice. ( b) Transfer of listing fees if any, received from all those 63 companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtain listing in nation-wide stock exchange(s). Unless you chose either of the above options within 45 days of receipt of this communication, we have been directed by SEBI to transfer you the Dissemination Board of nation-wide stock exchange(s). 17. Mr Sethi, learned Senior Counsel appearing for respondent no.2 states that BNL had not opted for any of the two options as mentioned in the letter dated 10.08.2018 and, therefore, is required to be transferred to the Dissemination Board. In view of the above, the principal grievance of the petitioners does not survive. This is so because the petitioners challenge to SEBI s clarification dated 06.04.2017 was premised on the basis that it had permitted companies listed on the CSE to be removed from the Dissemination Board contrary to its earlier circular dated 22.05.2014 and 10.10.2016. 18. In view of the above, this Court does not consider it necessary to examine the question whether the removal of BNL s name from the Dissemination Board of BSE was otherwise illegal as BNL is now required to be replaced on the Dissemination Board. 19. The petitioners have also raised c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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