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CS Executive · Capital Market and Securities Laws · Delisting of Equity Shares

Sunrise Textiles Ltd's promoter failed to make a public announcement to acquire shares at the minimum price when required under SEBI regulations. Under Section 15H of the SEBI Act, 1992, what is the penalty framework for this failure?

Section 15H of the SEBI Act provides a penalty of not less than ten lakh rupees, which may extend to twenty-five crore rupees or three times the profits made from the failure, whichever is higher. It is a range with a minimum, not a fixed sum.

  1. ANot less than ten lakh rupees, extending to twenty-five crore rupees or three times the profits made from the failure, whichever is higherCorrect
  2. BNot less than one lakh rupees, extending to ten lakh rupees only
  3. CNot less than ten lakh rupees, extending to twenty-five crore rupees or three times the profits, whichever is lower
  4. DA fixed penalty of twenty-five crore rupees in every case

Explanation

Section 15H penalises failure to make a public announcement at a minimum price. The penalty is at least ten lakh rupees and may extend to twenty-five crore rupees or three times the profits made from the failure, whichever is higher. The 'whichever is lower' option reverses the test, and the fixed amount ignores the range.

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