Escrow requirement for buy-back offers: mandated deposit, permitted instruments, merchant banker powers, and forfeiture consequences. Regulation 10 requires the company to deposit an escrow before opening a buy-back offer: 25% of consideration up to a specified threshold and 10% on the excess thereafter. Escrow may be cash, a bank guarantee, approved securities, or a combination; the merchant banker must be empowered to realise or instruct payment. Bank guarantees must remain valid until thirty days after closure; if securities are realised there is liability for deficits. Bank guarantees or securities are retained until obligations complete and an additional cash deposit of at least 1% is required where applicable. On payment to accepting security-holders and completion of buy-back formalities escrow is released; the Board may forfeit and distribute forfeited sums pro rata and for investor protection.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Escrow requirement for buy-back offers: mandated deposit, permitted instruments, merchant banker powers, and forfeiture consequences.
Regulation 10 requires the company to deposit an escrow before opening a buy-back offer: 25% of consideration up to a specified threshold and 10% on the excess thereafter. Escrow may be cash, a bank guarantee, approved securities, or a combination; the merchant banker must be empowered to realise or instruct payment. Bank guarantees must remain valid until thirty days after closure; if securities are realised there is liability for deficits. Bank guarantees or securities are retained until obligations complete and an additional cash deposit of at least 1% is required where applicable. On payment to accepting security-holders and completion of buy-back formalities escrow is released; the Board may forfeit and distribute forfeited sums pro rata and for investor protection.
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