Skip to content

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

Tara Foods Ltd's promoter fails to make payment of consideration to shareholders who sold shares under a letter of offer in an offer governed by SEBI regulations. Under the SEBI Act, 1992, what is the penalty exposure for this failure?

Section 15H of the SEBI Act, 1992 penalises failure to pay consideration to shareholders who sold under a letter of offer. The penalty is not less than ten lakh rupees and may extend to twenty-five crore rupees or three times the profits made, whichever is higher.

  1. AA penalty of not less than ten lakh rupees, extending to twenty-five crore rupees or three times the profits made, whichever is higherCorrect
  2. BA fixed penalty of one lakh rupees only
  3. CImprisonment only, with no monetary penalty
  4. DA penalty of up to ten lakh rupees only

Explanation

Section 15H of the SEBI Act covers failure to make payment of consideration to shareholders who sold under a letter of offer. The penalty is at least ten lakh rupees, extending to twenty-five crore rupees or three times the profits made, whichever is higher. The other options misstate the range.

Did you get it right without looking?

One question tells you little. A timed set on Delisting of Equity Shares shows your real accuracy, how long you take and where you lose marks.

Practise Delisting of Equity SharesFree diagnostic mock

More Delisting of Equity Shares questions