State with reasons whether the companies are allowed to make public issue under SEBI (ICDR) Regulations, 2018. (a) Jain, a promoter of XY Ltd. is categorized as a willful defaulter by SBI in accordance with the guideline
CS Executive · Securities Laws and Capital Markets · PYQS · December 2023
State with reasons whether the companies are allowed to make public issue under SEBI (ICDR) Regulations, 2018. (a) Jain, a promoter of XY Ltd. is categorized as a willful defaulter by SBI in accordance with the guidelines issued by the RBI. The company requires funds for its business expansion and plans to make IPO.
Answer & Explanation:
No, XY Ltd. is not allowed to make a public issue in this scenario. As per Regulation 5(1) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, an issuer shall not be eligible to make an initial public offer if the issuer or any of its promoters or directors is a willful defaulter or a fraudulent borrower. In the given case, Jain, who is a promoter of XY Ltd., has been categorized as a willful defaulter by SBI. Therefore, XY Ltd. cannot proceed with its IPO for business expansion.
Topics: SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018
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