Unlisted Indian
Companies allowed on a Pilot Basis for a period of Two Years to List and Raise
Capital abroad without the requirement of Prior or Subsequent Listing in India
At
present, unlisted companies that are incorporated in India are not allowed to
directly list in overseas markets without prior or simultaneous listing in
Indian markets. It has now been decided with the approval of the Union Finance
Minister that unlisted companies may be allowed to raise capital abroad without
the requirement of prior or subsequent listing in India.
This
scheme will be implemented on a pilot basis for a period of two years from the
date of notification of the scheme. After the initial two year period, the
impact of this arrangement will be reviewed.
The
approval to list abroad is subject to the following conditions:
· Unlisted
companies may be allowed to list abroad only on exchanges in IOSCO/FATF
compliant jurisdictions or those jurisdictions with which SEBI has signed
bilateral agreements;
·
The
Companies shall file a copy of the return which they submit to the proposed
exchange/regulators also to SEBI for the purpose of Prevention of Money
Laundering Act (PMLA). They shall comply with SEBI’s disclosure requirements in
addition to that of the primary exchange prior to the listing abroad;
·
While
raising resources abroad, the listing company shall be fully compliant with the
FDI Policy in force;
·
The
capital raised abroad may be utilised for retiring outstanding overseas debt or
for operations abroad including for acquisitions;
·
In
case the funds raised are not utilised abroad as stipulated above, such
companies shall remit the money back to India within 15 days and such money
shall be parked only in AD category banks recognised by RBI.
Ministry
of Finance (MoF), Department of Industrial Policy and Promotion (DIPP) and
Reserve Bank of India (RBI) would be issuing the necessary notifications in due
course in order to implement the required changes to the existing rules.
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