Fifteen weeks ago, Quick Ltd. listed 200 lakh equity shares of ₹10 each on Bombay Stock Exchange which is regulated by SEBI. The stock prices are stable in the range of ₹66 to ₹85 per share. Soon after listing, it was in

CS Professional · Capital Commodity and Money Market · PYQS · June 2015
Fifteen weeks ago, Quick Ltd. listed 200 lakh equity shares of ₹10 each on Bombay Stock Exchange which is regulated by SEBI. The stock prices are stable in the range of ₹66 to ₹85 per share. Soon after listing, it was in need of additional funds for a new project which was not envisaged at the time of IPO and it was advised that the quickest way to raise funds at a short notice is the preferential issue route. Accordingly, the shareholders passed a resolution on 30th January, 2014 to allot 30 lakh equity shares at a price of ₹66 each to the following investors: No. of Shares Michael Jackson 5 lakh New York Investment LLP (FII) 10 lakh India Asset Management Co. Ltd. (Indian MF) 10 lakh Rohan-Sohan Works Ltd. 2 lakh In & Out Share Trading Ltd. 3 lakh All the above preferential allottees were also investors (non-promoter category) in the IPO when the shares were issued at a price of ₹90. Two of them, i.e. In & Out Share Trading Ltd. and Michael Jackson partly sold their holdings while the India Asset Management Co. Ltd. has sold off its entire holding. The average of the weekly high and low prices for the fifteen weeks prior to the relevant date is ₹76 while that of two weeks preceding the relevant date is ₹70. The company has filed its listing application with the stock exchange and it was rejected for non-compliance of the SEBI guidelines. The company filed an appeal and won the case with some additional conditionalities. On hearing the verdict, the stock price further went-up and the average of weekly high and low for twenty-six weeks from the date of listing touched a high of ₹110. In light of the above, answer the following questions: What is the appellate body for appeal against the decision of a stock exchange? Whether a professional Company Secretary can represent the case before such body? Cite with relevant provisions of Acts/Regulations/Guidelines.

Answer & Explanation:

Securities Appellate Tribunal is the appellate body for appeal against the decision of a stock exchange. According to Section 22A (1) of Securities Contract (Regulation) Act 1956, where a recognised stock exchange, acting in pursuance of any power given to it by its bye-laws, refuses to list the securities of any company, the company shall be entitled to be furnished with reasons for such refusal, and may, - (a) within fifteen days from the date on which the reasons for such refusal are furnished to it, or (b) where the stock exchange has omitted or failed to dispose of, within the time specified in section 40 of the Companies Act, 2013, the application for permission for the shares or debentures to be dealt with on the stock exchange, within fifteen days from the date of expiry of the specified time or within such further period, not exceeding one month, as the Securities Appellate Tribunal may, on sufficient cause being shown, allow, appeal to the Securities Appellate Tribunal having jurisdiction in the matter against such refusal, omission or failure, as the case may be. Under Section 22C of Securities Contract (Regulation) Act 1956, the appellant may either appear in person or authorise one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate Tribunal. Accordingly, a professional Company Secretary can represent the case before the Appellate Tribunal.

Topics: Capital Market

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