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

Arjun Holdings, a prospective acquirer, already owns some shares in Bharat Polymers Ltd. The law requires disclosure of the aggregate shareholding before acquiring further shares of that body corporate. If Arjun Holdings fails to make this disclosure, which provision of the SEBI Act, 1992 attracts a penalty?

Section 15H(i) of the SEBI Act, 1992 penalises a person who fails to disclose the aggregate of his shareholding in the body corporate before acquiring any shares of it. The other clauses cover different defaults such as no public announcement, no letter of offer or unpaid consideration.

  1. ASection 15H(i), failure to disclose aggregate shareholding before acquiring sharesCorrect
  2. BSection 15H(iv), failure to pay consideration to shareholders who sold under the letter of offer
  3. CSection 12(1), acquiring shares without a certificate of registration as a merchant banker
  4. DSection 22, treating the acquirer as a public servant

Explanation

Section 15H(i) penalises a person required to disclose the aggregate of his shareholding in the body corporate before acquiring shares who fails to do so. Clause (iv) concerns non-payment of consideration after a letter of offer, which is a different default. Sections 12 and 22 are unrelated to disclosure by acquirers.

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