How To Remove Company From The Dissemination Boards Of Stock Exchanges?

In a recent circular, SEBI has set a new capital raising mechanism for companies on the Dissemination Boards. The regulator had also made it clear the companies failing to list on the nationwide bourses will have to provide an exit to investors. Such companies are directed to submit an action plan to the designated exchanges. SEBI has also warned stringent action for non-compliance of these guidelines debarring the company, its promoters, and its Directors, from the market for 10 years.

As many as 3000 companies were migrated to the dissemination board of the national wide bourses out of which close to 1000 companies have either listed on regional exchanges or given an exit to the shareholders. There are over 2000 companies still placed on the dissemination board.

With BSE recently hiking the listing fee, an exit from the stock market seems a more feasible move for small firms placed on the Dissemination Boards.

The companies seeking removal from Dissemination Board need to provide an exit as per the guidelines of SEBI. In such scenario, the services of an independent valuer help in the process. A Category I Merchant Banker is authorized to carry out the role of independent valuer as per the Companies Act. 2013. The designated stock Exchanges are entrusted with the powers to monitor the exit of Companies placed on their Dissemination Board.

The exit process starts with the Valuation of equity shares of the company, for which a Merchant Banker can be appointed by the Company. It is followed by opening of an escrow account which is used for payment to shareholders during the exit. The Merchant Banker supervises this escrow account for settlement with shareholders as per the exit offer document. Further, the service will also include Liasioning with the Stock Exchange for removal of company from the Dissemination Board.

Corporate CapitalVentures acts as an Independent Valuer for complete assistance in the removal of companies from Dissemination board of stock exchanges. Its services include supervision of escrow account, settlement of shareholders, and liasioning with the designated stock exchange.

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