MCA renders Relief on Delivery of Notice to Shareholders for Rights Issue [Read Circular]

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The Ministry of Corporate Affairs (MCA) issued a circular on Monday issued a circular stating the clarification on dispatch of Notice under Section 62(2) of the Companies Act, 2013 by the listed companies for rights issue opening up to July 31, 2020.

In a circular, the ministry said that it has received several representations for providing clarification on the mode of issue of a notice referred to in section 62(1)a(i) of Companies Act read with Section 62(2) of the Act for a rights issue of listed companies, in view of the difficulties faced by companies in sending notices through post or courier services on account of the threat posed by COVID-19.

“In view of the above and on account of the overall situation, it is hereby clarified that for rights issues opening up to 31st July 2020, in case of listed companies, which comply with the SEBI circular date 6th May 2020, inability to dispatch the notice to the shareholders through registered post or speed post or courier would not be viewed as a violation of section 62(2) of the Act,” the circular said.

As per the regulation, the offer shall be made by notice specifying the number of shares offered and limiting a time not being less than 15 days and not exceeding 30 days from the date of the offer within which the offer, if not accepted, shall be deemed to have been declined.

To Read the full text of the Circular CLICK HERE