Comment on the following statement: The acquisition of shares resulting from invocation of pledge by a public financial institution is exempt from open offer obligation.
CS Professional · Corporate Restructuring, Valuation and Insolvency · PYQS · June 2015
Comment on the following statement: The acquisition of shares resulting from invocation of pledge by a public financial institution is exempt from open offer obligation.
Answer & Explanation:
The statement is correct . As per Regulation 10 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, an acquisition in the ordinary course of business by invocation of pledge by Scheduled Commercial Banks or Public Financial Institutions shall be exempt from the obligation to make an open offer under Regulation 3 and Regulation 4. This exemption is provided to facilitate the recovery of dues by financial institutions and banks when a borrower defaults and the pledged shares are invoked.
Topics: SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
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