Sebi asks SEs to amend listing pact

Securities and Exchange Board of India has asked stock exchanges to amend their listing agreement to prevent violation of securities laws and exchange norms by listed companies while pursuing merger, restructuring and capital reduction plans.

The company should file the scheme, proposed to be filed before court or tribunal under sections 391, 394 and 101 of the Companies Act, 1956, with the exchange at least a month before it is presented to the legal body, Sebi said in a communication to the stock exchanges here on Friday. The scheme should be filed with exchanges for their approval, Sebi said.

The company should give an undertaking to ensure that restructuring, capital reduction and reconstruction schemes do not violate or override provisions of securities laws or the stock exchange requirements.

There have been instances where corporates while pursuing schemes of arrangements sanctioned by High Courts, have sought listing or delisting on the stock exchanges, violating securities laws, Sebi added.