Restriction on preferential allotment bars recent transferees and affected promoter groups from receiving preferential issues. Preferential allotments are restricted: persons who have recently sold or transferred equity shares, and where applicable their promoter group, are ineligible to receive specified securities on a preferential basis; the Board may relax this for equity and compulsorily convertible debt if corresponding relaxation under takeover regulations has been granted. Exemptions include qualifying inter se transfers and transfers after invocation of pledge by prescribed financial institutions. Promoters who failed to exercise warrants are ineligible for one year from expiry or cancellation. Issuers are ineligible if any promoter or director is a fugitive economic offender or if the issuer has outstanding regulatory or market infrastructure dues except where such dues are subject to admitted appeals or proceedings.