Imposing restrictions on wilful defaulters
The SEBI Board met in New Delhi on 12.3.2016 and took the following decisions:
The Master Circular on “Wilful Defaulters” issued by the Reserve Bank of India from time to time lays down safeguards to be exercised by banks to contain the financial activities of a wilful defaulter.
With the objective of restricting access to capital markets for raising funds from public, by such wilful defaulters, following proposals have been approved by the Board:
- No issuer shall make a public issue of equity securities / debt securities / non-convertible redeemable preference shares, if the issuer company or its promoter or its director is in the list of the wilful defaulters.
- Any company or its promoter or its director categorized as wilful defaulter may not be allowed to take control over other listed entity. However, if a listed company or its promoter or its director is categorized as wilful defaulter, and there is a take-over offer in respect of the listed company, they may be allowed to make competing offer for the said listed company in accordance with SEBI (SAST) Regulations, 2011.
- The criteria for determining a ‘fit and proper person’ in SEBI Regulations will be amended to include that no fresh registration shall be granted to any entity if the entity or its promoters or its directors or key managerial personnel, as defined under SEBI (ICDR) Regulations, 2009, are included in the list of wilful defaulters.
Source SEBI Board Meeting