What is the meaning of relevant date pertaining to Preferential Issue ? What is the relevant date in present case for preferential issue resolution ?
CS Professional · Capital Commodity and Money Market · PYQS · June 2019
What is the meaning of relevant date pertaining to Preferential Issue ? What is the relevant date in present case for preferential issue resolution ?
Answer & Explanation:
Meaning of Relevant Date Pertaining to Preferential Issue: According to SEBI (Issue of Capital and Disclosure Requirements) Regulations, the 'relevant date' for the purpose of pricing a preferential issue of equity shares is defined as: "The date thirty days prior to the date on which the meeting of shareholders is held to consider the proposed preferential issue." This date is crucial because the pricing of the preferential issue is linked to the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during a specified period preceding this relevant date. It ensures that the pricing reflects recent market conditions and prevents manipulation. Relevant Date in the Present Case: The resolution to offer and allot 75 lakh shares was passed by the shareholders on 28-02-2019 . This is the date on which the meeting of shareholders was held. As per the definition, the relevant date is thirty days prior to this meeting date. Therefore, the relevant date in the present case for the preferential issue resolution is 29th January, 2019 . (Note: Full marks may also be given if a candidate writes 30th or 31st January, 2019, considering variations in counting 30 days prior).
Topics: Capital Market
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