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

Zenith Pharma Ltd's acquirer crossed the trigger threshold and was required to make a public announcement to acquire shares at a minimum price, but failed to do so. Which statement about the SEBI Act, 1992 is correct?

Failure to make a required public announcement to acquire shares at a minimum price is penalised under Section 15H(ii) of the SEBI Act. The penalty provision covers the announcement, the letter of offer and payment of consideration, so the announcement failure is not outside it.

  1. AFailure to make the required public announcement falls within the penalty provision of Section 15HCorrect
  2. BOnly failure to send a letter of offer is penalised, not failure to announce
  3. CThe failure is dealt with only under Section 22
  4. DThe failure is penalised under Section 12(1) as an unregistered intermediary

Explanation

Section 15H(ii) expressly covers failure to make a public announcement to acquire shares at a minimum price, alongside failures to make the public offer by letter of offer and to pay consideration. Section 22 concerns public servants and Section 12 concerns registration of intermediaries, so they do not apply.

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