The Disclosure Cascade
A listed company proposing a scheme must make a series of disclosures under Regulation 30 of LODR and the related schedules. The first is the board approval of the scheme, which is price-sensitive information. The second is the stock exchange’s no-objection letter, which must be disclosed on the company’s website within twenty-four hours of receipt. The third is the NCLT filing and the NCLT order. The fourth is the record date and the allotment.
The NCLT Order Disclosure
The NCLT order approving the scheme is itself a material event. A listed entity has disclosed the NCLT order under Regulation 51(2) of LODR, and the disclosure should include the operative directions, the effective date, and the share exchange ratio. The disclosure should be made promptly after the order is received.
The Website Hosting Requirement
LODR requires the listed entity to host the disclosed information on its website for a minimum period of five years. The scheme documents, the NCLT order, and the stock exchange no-objection should be hosted under the company’s archival policy. A failure to host the documents is a continuing non-compliance.
The Post-Scheme Disclosures
After the scheme becomes effective, the transferee must disclose the revised shareholding pattern, the corporate governance report, and the related-party disclosures. The first post-scheme financial statements should explain the accounting for the merger and the restated comparatives.
The Documentation
The file should contain: the Regulation 30 disclosure of the board approval; the no-objection disclosure; the NCLT order disclosure; the website hosting confirmation; the post-scheme shareholding pattern; and the corporate governance report. A scheme file that contains only the NCLT order and not the LODR disclosures is incomplete.
Call to Action: For LODR disclosure sequencing during a scheme, Regulation 30 drafting, or website hosting compliance, contact office@anujdesaiassociates.com or 9619456656. Website: https://anujdesaiassociates.com. LinkedIn: linkedin.com/in/ca-anuj-desai-122547230.