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

Under Section 12A of the SEBI Act, 1992, clause (f) bars a person from doing which of the following in relation to a company whose securities are listed or proposed to be listed on a recognised stock exchange?

Section 12A(f) prohibits acquiring control of a listed or proposed-to-be-listed company, or acquiring securities beyond the permitted percentage of its equity share capital, in contravention of the regulations made under the SEBI Act. Ordinary corporate actions such as dividends or appointing a merchant banker are not covered.

  1. AAcquiring control of the company or securities above the permitted percentage of equity share capital, in contravention of the SEBI regulationsCorrect
  2. BAppointing a registered merchant banker for any issue of securities
  3. CDeclaring a dividend out of free reserves
  4. DChanging its registered office within the same city

Explanation

Section 12A(f) prohibits acquiring control of a company, or securities beyond the stated percentage of equity share capital, of a listed or proposed-to-be-listed company in contravention of SEBI regulations. The other options are ordinary corporate actions that Section 12A(f) does not address.

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