Lecture 11 Flashcards
What other conditions need to be fulfilled in addition to the general ones in case of right issue equal to or less than 750 million or 50% during a year?
- place the Schedule 1 on the website along the extract of BOD resolution of approval
- offer letter dispatched to shareholders shall include the Schedule 1
- the book closure shall be made within 30 days from the date of the resolution or within such time as approved by the commission
What other conditions need to be fulfilled in addition to the general ones in case of right issue equal to or greater than 750 million or 50% during a year?
no company shall issue right issue exceeding this threshold if the issuing company, its sponsor, promotor, substantial shareholder and directors have overdues or defaults irrespective of the amount appearing in the report obtained from Credit Information bureau
2. draft offer document shall be prepared by the company and approved by the board in english and urdu language
3. the offer document shall contain all disclosures as per Schedule 1 which should be true and adequate to make informed investment decisions
When shall the offer document be submitted to the PSX in case of 750m or above?
the draft offer document shall be submitted to PSX and the commission within 45 days of the announcement and it shall be placed on PSX and the company’s website on the same day.
What is the time limit within which the offer document is open to public comments in case of 750m or above?
it shall be the discretion of the company and its board to seek public comments on the offering document and the public can submit its comments within 7 days of placement
Within what time frame the PSX and the commission shall submit their observations and changes on the draft offering document in case of 750m or above?
within 15 days of placement
When shall the final offer document be submitted to PSX in case of 750m or above?
the board shall ensure that the final offer document is submitted within 20 days of the date of comments/observations whichever is later.
What are the disclosure requirements regarding the comments/observations on the offer document in case of 750m or above?
The Board shall disclose in the tabular format on PSX and the company’s website as per Schedule 2, all the comments received along with the explanations as to how they are addressed
What are the requirements regarding the listing of the offer document on the PSX in case of 750m or above?
The final offer document shall be placed on the PSX website along with the book closure dates and the relevant right issuance timelines in accordance with the Section 83 of the Act
For how long should the sponsors retain their shareholding after the right issue in case of 750m or above ?
the sponsors shall retain their entire shareholding for one year or project completion whichever is later
Who shall monitor the proceeds utilization of the right issue and for how long in case of 750m or above?
The statutory auditor shall monitor the proceeds utilization till 95% of the proceeds are utilized in the manner referred to in the final offer letter and issue half yearly report to the issuer.
What are reporting requirements related to the proceeds utilization of the right issue in the financial statements in case of 750m or above?
The issuer will include the report along with the comments , if any, in its half yearly and annual financial statements.
How can a right issue be cancelled after its announcement?
Right issue once announced by the board of a listed company shall not be varied, postponed, withdrawn or cancelled ( except that it will stand extinguished in case it is not completed within the timeline and manner specified in these regulations
What are the additional requirements if the company opts for announcing minimum subscription i.e less than the total right issue?
- minimum subscription amount should not be less than 90% of the size of right issue
- directors/substantial shareholders undertake in writing that they will subscribe the right shares to be offered to them as per their right entitlement to the extent of their proportion of minimum subscription
- public portion of the minimum subscription shall be underwritten by the underwriter, not being the associated company or associated undertaking of the issuer
- right entitlement letter will be traded on the PSX, risks and rewards shall be sole liability of the investors.
What additional conditions need to be fulfilled if the company opts for ASBA facility for receiving of right proceeds ?
- the company or the banker to the issue, upon receipt of instructions from the subscriber , immediately block the subscription money in the respective account of the subscriber
- in case of subscribers other than ASBA , if the company fails to refund the subscription amount within 15 days, it shall be liable to pay penalty of 15% per annum to the subscriber along with the subscription amount.
What are the conditions regarding the bonus issue of shares?
- As per the provisions of the articles of association
- the issue of bonus shares is approved by the board
