Disclosure of reasons for encumbrance by promoter of listed companies In order to bring greater transparency regarding reasons for encumbrance, particularly when significant shareholding by promoter along with persons acting in him (PACs) is encumbered, it has been decided to prescribe additional disclosure requirements under Regulation 31(1) read with Regulation 28(3) of Takeover Regulations, as follows, –
The promoter of every listed company shall specifically disclose detailed reasons for encumbrance if the combined encumbrance by the promoter along with PACs with him equals or exceeds:
a) 50% of their shareholding in the company; or
b) 20% of the total share capital of the company,
in the format provided ,within two working days from the creation of such encumbrance. Such disclosures will be warranted on every occasion, when the extent of encumbrance (having already breached the above threshold limits) increases further from the prevailing levels.
If the existing combined encumbrance by the promoter along with PACs with him is either 50% or more of their shareholding in the company or 20% or more of the total share capital of the company as on September 30, 2019, he shall specifically make first disclosure on detailed reasons for encumbrance in the format provided by October 04, 2019.
The disclosure on reasons for encumbrance in the format provided at shall be made to, –
a) every stock exchange where the shares of the company are listed; and
b) the listed company
The recognised stock exchanges shall maintain and separately disseminate the list of such companies along with details of encumbrance and reasons for encumbrance, on their websites promptly; and
The listed companies shall disclose the contents on their websites within two working days of receipt of such disclosure.
The provisions of this shall come into effect from October 01, 2019.
Please find the attached format of Disclosure of reasons for encumbrance and Details of all the existing events/ agreements pertaining to encumbrance.
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