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CS Executive · Capital Market and Securities Laws · Acquisition of Shares and Takeovers - Concepts

An acquirer made a public offer under the takeover regulations. Several shareholders tendered shares under the letter of offer, but the acquirer did not pay them the consideration. Which clause of Section 15H does this default fall under?

The default is failure to make payment of consideration to the shareholders who sold their shares pursuant to the letter of offer, which is clause (iv) of Section 15H. It differs from not sending the letter of offer, which is clause (iii).

  1. AFailure to disclose aggregate shareholding before acquiring shares
  2. BFailure to make a public announcement at a minimum price
  3. CFailure to make payment of consideration to shareholders who sold shares pursuant to the letter of offerCorrect
  4. DFailure to send a letter of offer to shareholders of the company

Explanation

Clause (iv) of Section 15H covers failure to pay consideration to shareholders who sold shares pursuant to the letter of offer. Failing to send the letter of offer is clause (iii), a different default, and here the offer was made.

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