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SEBI alerts investors against open offers from companies
PrintMarkets regulator SEBI Tuesday asked investors to be 'alert' about public announcements of share purchase plans of the companies where they have invested.
A company needs to issue a 'public announcement' in newspapers and through stock exchanges for the benefit of investors whenever they need to acquire shares from the minority shareholders including in cases of delisting and takeovers.
The move is part of SEBI's efforts to educate the investors about their rights.
"Be alert to public announcements for acquisition of shares of the companies that you have invested in," the Securities and Exchange Board of India (SEBI) tweeted.
The delisting and open offer decisions can impact the interest of shareholders in a big way.
Therefore, the investors need to be aware about such announcements made by the companies, in which they have invested.
An open offer is triggered when an acquirer purchases 25 percent stake in a listed company. In that case, the buyer has to pick up an additional 26 percent holding in the target firm.
In the delisting process, promoters need to ensure that at least 25 percent of minority shareholders participate in such a process, or else they need to demonstrate that the entire 100 percent investors have been approached.
In a separate tweet, SEBI also warned investors against schemes which promise very high returns in a short duration, including those claiming to create millionaires overnight.
The warning to investors comes as certain entities were running ponzi schemes in the country which siphoned of thousands of crore of rupees from unsuspected investors through such fraud schemes.
The regulator asked investors not to fall for schemes that assures unbelievably high returns in a very short time.
SEBI has begun exploring Twitter to spread investor awareness. In another recent tweet, the regulator asked the investors not to invest in stock market with borrowed funds. PTI
A company needs to issue a 'public announcement' in newspapers and through stock exchanges for the benefit of investors whenever they need to acquire shares from the minority shareholders including in cases of delisting and takeovers.
The move is part of SEBI's efforts to educate the investors about their rights.
"Be alert to public announcements for acquisition of shares of the companies that you have invested in," the Securities and Exchange Board of India (SEBI) tweeted.
The delisting and open offer decisions can impact the interest of shareholders in a big way.
Therefore, the investors need to be aware about such announcements made by the companies, in which they have invested.
An open offer is triggered when an acquirer purchases 25 percent stake in a listed company. In that case, the buyer has to pick up an additional 26 percent holding in the target firm.
In the delisting process, promoters need to ensure that at least 25 percent of minority shareholders participate in such a process, or else they need to demonstrate that the entire 100 percent investors have been approached.
In a separate tweet, SEBI also warned investors against schemes which promise very high returns in a short duration, including those claiming to create millionaires overnight.
The warning to investors comes as certain entities were running ponzi schemes in the country which siphoned of thousands of crore of rupees from unsuspected investors through such fraud schemes.
The regulator asked investors not to fall for schemes that assures unbelievably high returns in a very short time.
SEBI has begun exploring Twitter to spread investor awareness. In another recent tweet, the regulator asked the investors not to invest in stock market with borrowed funds. PTI
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