THE GAZETTE OF INDIA

regulations · 1992 · State unknown

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Parent: THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 (7c4c1f5343adab106c3a94cafc08a5ecf5957ae7)

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THE GAZETTE OF INDIA EXTRAORDINARY PART - II SECTION 3 SUB SECTION (II) PUBLISHED BY AUTHORITY SECURITIES AND EXCHANGE BOARD OF INDIA NOTIFICATION the 24 September, 2002 SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF SWEAT EQUITY) REGULATONS, 2002 S.O. No.1031 In exercise of the powers conferred by Section 30 of the Securities and Exchange Board of India, 1992 read with Clause (d) of sub sections (1) of Section 79A as inserted by the Companies Amendment) Act, 1998 (1 of 1999), the Board, hereby makes the following regulations, namely: CHAPTER - I PRELIMINARY Short title and commencement. (a) These regulations shall be called the Securities and Exchange Board of India (Issue of Sweat Equity) Regulations, 2002. b) These regulations shall come into force on the date of their publication in the Official Gazette. Definitions: 2_ (1) In these regulations, unless the context otherwise requires: (a) Act means the Securities and Exchange Board of India Act, 1992; b) associate' includes a person; who directly o indirectly by himself 0r in combination with relatives, exercise control over the company; O, (ii) whose employee, officer Or director is also a director, officer or employee of the company; Board' means the Board as defined in clause (a) of sub section (1) of section 2 of the Act; control' shall include the right to appoint majority of the directors Or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding Or management rights O shareholders or voting agreements Or in any other manner; 'company' means a company as defined in Companies Act, 1956; director' means; a director as defined in sub-section (13) of section 2 of the Companies Act, 1956; '

Rule TOC

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15 · (1) The company shall ensure that a) The explanatory statement to the notice for general meeting shall contain disclosures as are specified under clause (b) of sub section (1) of Section 79A and sub regulation (1) of Regulation 5. b The Auditor'$ certificate as required under Regulation 10 shall be placed in the general meeting of shareholders. The company shall within seven days of the issue of sweat equity, issue Or send statement to the exchange, disclosing: number of sweat equity shares; 11) price at which the sweat equity shares are issued; iii) total amount invested in sweat equity shares; (iv) details of the persons to whom sweat equity shares are issued; and the consequent changes in the capital structure and the shareholding pattern after and before the issues of sweat equity.

16 · The Board may, on failure of the merchant banker to comply with the obligations under these regulations or failing to observe due diligence in respect of valuation of intellectual property or value addition, initiate action against merchant banker in terms of Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992.

17 · (1) The Board may, Suo-motu or upon information received by it, cause an inspection to be made of the books of account or other books and papers of any company or an investigation to be made in respect of the conduct and affairs of any person associated with the process of sweat equity, by appointing an officer of the Board [not below the rank of Assistant General Manager for the purpose of conducting inspection and not below the rank of Division Chief for the purpose of conducting an investigation]: Provided that no such inspection or investigation shall be made except for the purpose specified in sub-regulation (2).

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19 · (1) The Inspecting or Investigating Officer shall, on completion of the inspection or Investigation after taking into account all relevant facts and circumstances, submit a report to the Board. On the receipt of report under sub-regulation (1), the Board may initiate such action as it may be deemed fit to do in the interests of investors and the

20 · The Board may in the interests of the securities market and without prejudice to its rights to initiate action, including criminal prosecution under Section 24 of the Act O Section 621 of Companies Act give such directions as it deems fit including: