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

Under the SEBI Act, 1992, if a person required under the Act or its regulations fails to make a public announcement to acquire shares at a minimum price, what penalty is prescribed under section 15H?

Under section 15H of the SEBI Act, failing to make a required public announcement attracts a penalty of at least ten lakh rupees, which may extend to twenty-five crore rupees or three times the profits made from the failure, 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 from the failure, whichever is higherCorrect
  2. BA penalty of up to one lakh rupees per day of default, subject to a maximum of one crore rupees
  3. CImprisonment alone, with no monetary penalty
  4. DA penalty of not less than twenty-five crore rupees, with no upper limit

Explanation

Section 15H covers failure to disclose holdings, make a public announcement, make a public offer by letter of offer, or pay consideration to shareholders. The penalty is not less than ten lakh rupees but may extend to twenty-five crore rupees or three times the profits made, whichever is higher. The option fixing 25 crore as the minimum reverses the floor and the ceiling.

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