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CS Executive · Capital Market and Securities Laws · Listing Obligations and Disclosure Requirements

Under section 17A of the SCRA, 1956, an issuer of securities under sub-clause (ie) of clause (h) of section 2 applies for listing before the offer document, but the exchanges refuse permission. Within what period must it repay application money before joint and several liability with interest arises?

The issuer must repay within eight days after it becomes liable to repay. After the eighth day, the issuer and every defaulting director or trustee become jointly and severally liable to repay with interest at fifteen per cent per annum under section 17A(3).

  1. AWithin eight days after it becomes liable to repayCorrect
  2. BWithin fifteen days after it becomes liable to repay
  3. CWithin thirty days of the offer closing
  4. DWithin eight days of the application for listing

Explanation

Section 17A(3) requires the issuer to repay forthwith, and if the money is not repaid within eight days after it becomes liable, the issuer and defaulting directors or trustees are jointly and severally liable to repay with interest at fifteen per cent per annum. Fifteen is the interest rate, not the day count.

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