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

Which of the following companies falls within the scope of the substantial acquisition prohibition in Section 12A(f) of the SEBI Act, 1992?

Section 12A(f) covers a company whose securities are listed, or proposed to be listed, on a recognised stock exchange. Unlisted entities with no listing proposal fall outside it, because the clause is expressly linked to the listed or proposed-to-be-listed status of the securities.

  1. AA company whose securities are listed or proposed to be listed on a recognised stock exchangeCorrect
  2. BA private company with no plans to list its securities
  3. CA company whose debentures are held only by a single bank
  4. DA partnership firm whose partners hold unlisted units

Explanation

Clause (f) of Section 12A applies to a company whose securities are listed or proposed to be listed on a recognised stock exchange. A private company with no plans to list, or a firm with unlisted interests, is outside the clause. The key test is the listed or proposed-to-be-listed status.

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