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MCA CLARIFICATION ON DISPATCH OF NOTICE BY LISTED COMPANIES

CSLalit Rajput
MCA Clarifies Listed Companies Can Dispatch Rights Issue Notices Electronically During COVID-19, Per SEBI Guidelines, Not Violating Section 62(2). The Ministry of Corporate Affairs (MCA) issued a clarification regarding the dispatch of notices by listed companies for rights issues due to challenges posed by the COVID-19 pandemic. According to General Circular no. 21/2020, dated May 11, 2020, listed companies facing difficulties in sending notices through postal or courier services will not be considered in violation of Section 62(2) of the Companies Act, 2013, if they comply with the Securities and Exchange Board of India (SEBI) Circular dated May 6, 2020. This applies to rights issues opening until July 31, 2020. (AI Summary)

MCA vide General Circular no. 21/ 2020 dated 11th May, 2020 has issued CLARIFICATION ON DISPATCH OF NOTICE UNDER SECTION 62(2) OF COMPANIES ACT, 2013 BY LISTED COMPANIES FOR RIGHTS ISSUE OPENING UPTO 31ST JULY, 2020.

Key Highlights:

1.  MCA has received several representation for seeking clarification on the mode of issue of notice as  per Section 62 (1) (a) (i) of the Companies Act, 2013 read with Section 62 (2) of the Act.

2. It deals with Right issue by the Listed Companies.

3. In view of COVID-19 pandemic, Companies has faced difficulties to send notices through postal or courier services.

4. MCA has examined all the representation and also take note of SEBI Circular no. SEBI/HO/CFD/DIL2/CIR/P2020/78 dated 06th May, 2020.

  • SEBI Circular : Relaxations relating to procedural matters – Issues and Listing

https://www.sebi.gov.in/legal/circulars/may-2020/relaxations-relating-to-procedural-matters-issues-and-listing_46652.html

5. Clarification from MCA:

For Right Issue opening 31st July 2020:

In case of Listed Entities, which comply with the SEBI/HO/CFD/DIL2/CIR/P2020/78 dated 06th May, 2020, inability to dispatch the notice per Section 62 (1) (a) (i) of the Companies Act, 2013 read with Section 62 (2) of the Act, to their shareholders through registered post / speed post / courier would not considered as violation of Section 62(2) of the Companies Act, 2013

Link: http://www.mca.gov.in/Ministry/pdf/Circular21_11052020.pdf

 

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