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CS Executive · Capital Market and Securities Laws · Listing Obligations and Disclosure Requirements

A recognised stock exchange proposes to delist the securities of Kaveri Agro Ltd on a prescribed ground. Which requirement must the exchange satisfy under Section 21A of the SCRA, 1956?

The exchange must record its reasons for delisting and must give the company a reasonable opportunity of being heard before delisting its securities. Section 21A imposes these safeguards; no shareholder consent or Central Government approval is required by it.

  1. AObtain prior written consent of every shareholder
  2. BRecord reasons and give the company a reasonable opportunity of being heardCorrect
  3. CObtain prior approval of the Central Government
  4. DGive the company a hearing only if it has requested one in writing before delisting

Explanation

Section 21A allows delisting after recording reasons on a prescribed ground, and the proviso bars delisting unless the company has had a reasonable opportunity of being heard. Shareholder consent or Central Government approval is not required by this section.

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