A listed entity that is undertaking an NCLT scheme is subject to the continuous disclosure obligations under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”). The scheme is a material event, and the listed entity must disclose it to the stock exchanges within the prescribed timeline.
The Disclosure Trigger
Regulation 30 of the LODR requires the listed entity to disclose any event or information that is material to the investors. The scheme is a material event, and the disclosure must be made as soon as reasonably possible and not later than twenty-four hours from the occurrence of the event. The disclosure must include the rationale, the parties, the appointed date, the share exchange ratio, and the regulatory approvals required.
The Scheme Filing
The listed entity must file the draft scheme with the stock exchanges before it files the scheme with the NCLT. The stock exchanges process the scheme and communicate SEBI’s observation letter. The observation letter is not an approval; it is SEBI’s statement of the securities law issues, and the NCLT will consider it before sanctioning the scheme.
The Post-Sanction Disclosures
After the NCLT sanction, the listed entity must disclose the certified copy of the order, the effective date, and the post-scheme shareholding pattern. The entity must also comply with the LODR’s requirements relating to the composition of the board and the committees, the public shareholding, and the other governance norms.
A technically sound scheme includes a disclosure calendar that maps each LODR requirement to the scheme timeline, and it is coordinated with the company secretary and the stock exchange.
Call to Action
Anuj Desai & Associates advises listed entities on the SEBI LODR aspects of an NCLT scheme—from the Regulation 30 disclosure and the observation letter to the post-sanction compliance and the continuous disclosure calendar. If your scheme involves a listed entity, we can help you manage the regulatory interface.
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