[This article was originally published on 7 July, 1999 in the leading financial daily, Financial Express. See the link below.]
Every company coming out with a public issue of shares or debentures is compulsorily required under Section 73 of the Companies Act, 1956 to get them listed with one or more recognised stock exchanges to facilitate trading in these bourses.
The prospectus issued at the time of a public issue of shares or debentures must mention the names of the stock exchanges where application for listing of such securities has been made. If a company fails to obtain listing permission from all the stock exchanges where the shares are proposed to be listed, the allotment made in pursuance of such a prospectus is void.
In view of the amendment made to Section 73 in 1974, which was intended to nullify the effect of the Supreme Court’s judgement to the contrary in Union of India vs Allied International Products Limited, AIR 1971 SC 251, it is now necessary for a company to obtain permission for listing from all the stock exchanges to which application for listing was made. Even if one stock exchange refuses permission forlisting, the allotment would be void.
Read the full article in Financial Express.
