New Delhi: The leading stock exchanges have asked all listed companies to promptly disclose to them all "material developments" relating to payment defaults, including inter-creditor agreements made in this respect.
BSE and NSE have issed the direction in consultation with the regulator, the Securities Exchange Board of India.
The exchanges have also announced additional surveillance measures for companies involved in the resolution process under the Insolvency and Bankruptcy Code (IBC) or Inter Creditor Agreement (ICA).
In separate circulars, the bourses said developments related to the ICA are likely to have significant impact on prices of the securities of the entities whose assets have been deemed to be 'stressed' on account of default or delay of interest/principal payments.
Therefore, developments such as signing of the ICA by lenders of a listed company is deemed to be “material” as it is likely to have significant impact on the ownership and governance of the company, the exchanges said, citing Sebi's disclosure regulations.
The Reserve Bank’s Prudential Framework for Resolution of Stressed Assets Directions, 2019 provides for lenders to take a prima facie review of defaulting borrowers within 30 days of default. During this review period, the lenders may decide on a resolution strategy which may include putting in place a resolution plan or alternatively initiate legal proceedings under the IBC.
In cases where a resolution plan is to be implemented, all lenders can enter into an ICA during this review period.
In view of this, the exchanges have now asked all listed companies to promptly disclose all material developments pertaining to any default and about the ICA.
Besides, all entities who get confidential information in course of developments pertaining to default and/or ICA, will need to maintain confidentiality of such information, until the same is disclosed to the exchanges for public dissemination.
Besides, listed companies on their own would have to promptly confirm or deny and clarify to stock exchanges regarding any rumours or news on developments pertaining to default and/or ICA.
Detailing the criteria for short-listing of securities for action and the surveillance action, the exchanges said additional surveillance would be applicable in case of a closing share price variation of more than 25 per cent in five consecutive trading days, post disclosure of default.
The surveillance action in this case would be applicable margin rate of 40 per cent or existing margin, whichever is higher, subject to maximum rate of margin capped at 100 per cent from T+3 day for a minimum period of 15 days....