PROTECTING INTERESTS OF MINORITY SHAREHOLDERS POST CIRP: AN ERRONEOUS APPROACH

ABSTRACT

The Securities Exchange Board of India issued a consultation paper in November 2022 proposing a framework to protect the interests of non - promoter shareholders of a listed company that has undergone the Corporate Insolvency Resolution Process. The market regulator noted that certain grievances were received from retail shareholders that in cases of a company delisting post the approval of resolution plan, they were left with nothing in their hands. The value of their shares becomes zero overnight without any prior intimation to them. Further, post-delisting, it is only the big players who acquire the stake in the new entity, and there is nothing in it for the existing retail shareholders of the company. It is in light of this background, that the Board proposed the said framework. Under the framework, the resolution applicant has to mandatorily offer equity of the fully diluted capital structure to the  extent of  up to the minimum public shareholding percentage (currently 25%) on the same pricing terms as agreed upon by the resolution applicant. The new entity shall endeavour to achieve at least 5% public shareholding through such mode of offer made to the  non-promoter public shareholders. This article has critiqued the proposed framework and the authors are of the opinion that such a framework is undesirable and does more harm than good. The article has been divided into four parts. Part I introduces the issue. Part II explains the proposed framework. Part III criticises the proposed framework and undertakes an empirical study to support the same. Part IV concludes the article and suggests certain measures to limit the losses of retail investors in a company undergoing Corporate Insolvency Resolution Process.

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I. INTRODUCTION

The Securities Exchange Board of India (SEBI) was established with the passing of the Securities Exchange Board of India Act, 1992.[1] SEBI acts as the regulator of capital markets in India. The preamble of the SEBI Act prescribes its objectives, which include the regulation of the securities market and protecting the interest of investors in the market.[2] Specifically, the protection of retail investors is among the top priorities of financial market regulators around the world.[3] As a result, SEBI prescribes several investor protection measures from time to time.[4] Since COVID-19, the participation of retail investors has increased multifold in the Indian stock market. The share of retail investors in the stocks listed on NSE has been touching record highs.[5] As per a BSE data, the number of registered investors increased by 32% in 2022.[6] This rise in participation of retail investors can be attributed to the coming up of new and easy-to-use discount brokers such as Groww and Zerodha which charge very low brokerage, the rise of UPI- based capital transfers and the massive returns provided by equity markets in 2021 and 2022, among other factors.[7] Therefore, with the increased participation of retail investors in recent times, it has become all the more important for SEBI to take measures for their protection.

Considering the same, SEBI issued a consultation paper in November 2022 proposing a framework to protect the interests of minority shareholders of a listed company that has undergone Corporate Insolvency Resolution Process (CIRP).[8] In the Consultation Paper, SEBI noted that when a listed company gets admitted into CIRP, it can face two outcomes post the completion of the resolution process- liquidation or a successful resolution. In case of liquidation, the company will automatically get delisted and, in that of a successful resolution, the company either gets delisted or stays listed depending on what the resolution plan mandates.

SEBI had received various grievances in cases where a listed company got delisted post the approval of a resolution plan. In such a scenario, the public equity shareholders are left with no value of their shares. The grievances noted that the value of minority shareholders becomes zero overnight with no prior intimation to the public. Further, post-delisting, it is only the big players who acquire the stake in the new entity, and there is nothing in it for the existing retail shareholders of the company. It was put forward that even the minority retail shareholders should get a fair value of their shares in the new entity formed post-restructuring.

Taking cognizance of the above grievances, SEBI has proposed a framework where an opportunity shall be provided to the existing minority shareholders of a company that has successfully undergone CIRP to acquire equity in the new entity. The authors, on the other hand, are of the opinion that this kind of framework is undesirable and does more harm than good. While proposing this solution for non promoter public shareholders, SEBI is in effect acting against the interests of creditors. It needs to be emphasised that the main objective of the insolvency law is to maximise the value of assets of the corporate debtor and ensure that the creditors can recover their debts to the maximum.[9] The recovery of debt by creditors builds trust in the credit system of the economy and ensures easy availability of credit, thereby promoting overall entrepreneurship and Ease of Doing Business in the country.[10] However, the present framework is enriching shareholders who have the last position under the waterfall mechanism, at the cost of creditors.

Part 1 of the article will focus on the drawbacks of the proposed SEBI framework and opine that the framework needs to be devised in a better way for the overall insolvency regime in India. Part II of the article explains the given framework. Part III criticises these merits, point by point, and in doing that, also explains the various fault lines that lie in the proposed framework [III]. In this context, the problem has been highlighted with reference to the past trends of the listed companies that have undergone CIRP. The final section concludes the article by arguing that the proposed framework should not be implemented and proposes certain changes to limit the losses of retail shareholders in a company undergoing CIRP [IV].

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II. UNDERSTANDING SEBI’S PROPOSED FRAMEWORK

The Insolvency and Bankruptcy Code, 2016 (IBC) was developed with the crucial objective of speedy resolution of bankrupt companies.[11] SEBI, in the consultation paper, noted that presently, in the case of a listed company undergoing resolution, the existing minority shareholders get squeezed out as the CIRP process results in huge capital dilution and sometimes even delisting. As a result of the CIRP process, the new acquirer becomes the sole owner of the corporate debtor, and the value of shares of the minority shareholders becomes almost zero. [12]

To protect the interest of these minority shareholders, SEBI has proposed a framework suggesting that the current minority shareholders of an entity under CIRP should also be given the option to become shareholders in the organisation after its restructuring, in proportion to their holdings.

The consultation paper proposes that the acquirer must make an offer of shares to current minority shareholders so that they may become shareholders in the new entity post-restructuring. The equity offered to the public can range from five to twenty-five percent based on the acquirer's personal equity position. This offer must be made at the price at which the acquirer himself has bought the shares.

The entity will stay listed post-restructuring if and only if, at least 5% of the offer is accepted by the existing minority shareholders. Otherwise, the company will get delisted as per the usual delisting procedure for companies post CIRP under the SEBI (Delisting of Equity Shares) Regulations, 2021.[13] In order to prevent promoters of a defaulting entity from using the proposed framework to re-enter the market, SEBI has disallowed issuing of shares to the company's former promoters, their families, senior managerial people, and directors. Furthermore, it has also been mentioned that the said mechanism shall be an integral part of all the resolution plans submitted for listed companies undergoing CIRP.

The core of the IBC process is the prompt identification of stress in an entity and the sale of that entity as a "going concern" in order to realise the maximum value. Minority shareholder protection proposed by SEBI, as well as all other government measures to safeguard all creditors through a flurry of legal revisions, would only be effective if the IBC is kept true to its original purpose.[14] For this purpose, the resolution applicant must be given undisputed rights with respect to the corporate debtor it is undertaking to revive.

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III. FAULT LINES IN SEBI’S FRAMEWORK

The proposed framework is replete with various shortcomings and reflects SEBI’s poor understanding of the Insolvency regime in India. If implemented, the framework will do more harm than good. In fact, the framework will impede the main objective of the Code itself, which is to ensure the effective resolution of corporate insolvencies and maximise the value of the assets of the corporate debtor. In the Consultation Paper, SEBI has provided five merits of its proposal. This section criticises the merits point by point and, in doing so, also explains the various fault lines which are inherent in the proposed framework.

A. Company will be able to retain its status as a listed company with minimum public float post-restructuring

The problem here lies with the fact that SEBI has presumed that the RA surely wants to keep the company as listed post its acquisition. It needs to be noted that keeping a company listed brings with it numerous obligations which an RA might not want to undertake.

In fact, many companies get themselves delisted based on their financial considerations.[15] They may find that the costs of remaining publicly listed now no longer outweigh the benefits of remaining listed. Listing is subject to substantial direct costs[16] such as compliance and administrative costs, disclosure costs, and registration fees, among others. The annual listing cost for a company with a paid-up capital of up to Rs. 100 crore is around 3 lakhs on both NSE[17] and BSE[18] and increases with the increase in paid-up capital. Marosi and Massoud, in 2007,[19] found that firms in the USA tend to delist due to fewer valuable growth opportunities, higher leverage, and lower market momentum. Additionally, according to Pour and Lasfer's research from 2015[20] businesses that were delisted from the London Stock Exchange's Alternative Investment Market did so because they were unable to obtain money to ensure their inside ownership and leverage remained high.

Hence, staying listed will lead to increased costs for the RA, acting as an additional burden, and will result in money being diverted from clearing dues of the creditors to maintaining the costs of staying listed.

Moreover, the proposed framework indirectly protects the interests of shareholders at the cost of creditors, which in itself is a controversial aspect. The supremacy of financial creditors per se over shareholders can be ascertained by various factors. The CoC includes only the financial creditors and in the waterfall mechanism shareholders are in last place and creditors in second place after covering the costs of the insolvency process.[21] Hence, protecting shareholders at the cost of creditors is against the most basic tenet of the resolution process itself, which is to maximise the interests of creditors. Additionally, as per the delisting rules,[22] it can be established that the only safeguard provided to minority shareholders is that they cannot be treated worse than the promoters; nonetheless, other than the resolution applicant's generosity, the Regulations do not offer any additional value to the minority shareholder. The SC, in the case of Jaypee Kensington Boulevard Apartments Welfare Association vs NBCC (India) Ltd & Ors.,[23] also dealt with the issue of minority shareholders and ascertained that

under the scheme of IBC only the COC is entrusted with the task of dealing with the Resolution Plan with Shareholders, who is already reeling under debts, having no right to participate. It further clarifying that the shareholders stand last in the priority under Sec 53 of the Code and hence when the promoter’s shareholding is extinguished in toto without any consideration, even nominal exit price for minority shareholders cannot be termed as unfair or inequitable. In any case, the decision based on commercial wisdom of COC is not amenable to judicial review.”

Considering all these facts it can be said that the minority shareholders should be treated at par with other shareholders of the company and hence cannot be granted  rights superior to the  creditors.

Moreover, SEBI has proposed that the said framework shall be an integral part of the resolution plan submitted by RA for all listed entities undergoing CIRP. This means that every Resolution Plan that the CoC will be scrutinising for a listed entity will include the provision of offering certain shares to existing minority shareholders and thereby the possibility that if the minimum offer has been met then the company would stay listed. However, this is against the supremacy of the CoC in financial decisions under the Code as has been recognized in the Swiss Ribbons Case[24]. Further, in the case of  K. Shashidhar v. Indian Overseas Bank & Ors[25], it has been held by the apex court that the "legislature intentionally did not provide any grounds to contest the "commercial wisdom" of the individual financial creditors or their collective decision before the adjudicating authority, and the commercial wisdom of CoC has been given paramount status without any judicial intervention, ensuring completion of the stated processes within the timelines prescribed by IBC.” Hence, asking CoC to comply with an additional regulation under SEBI rules only makes compliance under IBC difficult and might hamper the basic rules using which the decision of successful resolution of a company are made.

B. Lesser Burden on Resolution Applicant as part of equity can be met through offer to non promoter public shareholders

SEBI has argued that the RA should offer a certain percentage of equity to existing minority shareholders as it will lead to an additional source of funding for him. However, herein SEBI is taking decisions on behalf of the Resolution Applicant. It should be completely at the discretion of the RA whether he wants non minority shareholders as an additional source of funding or not. Making it compulsory for him to offer a certain percentage of equity and thereby dissolving his share in the new entity while assuming all the risk will only discourage the prospective  RAs to apply for the bid, thereby harming the insolvency resolution process in India. Moreover, mature insolvency jurisdictions such as the US  and UK do not have any such provision incorporating the rights of minority shareholders.

In the US the Absolute Priority Rule (APR)[26] is applied while dictating the order of claims by which recoveries are distributed among creditors. APR lists down the classified creditors into different classifications and establishes the prioritisation of claim. The recoveries are organised in line with APR so that the classes that include higher priority creditor claims are paid first. Lower priority claim holders are not entitled to any compensation until and unless all classes of higher ranking claimants have received full compensation; otherwise, the remaining creditors will only receive partial or no compensation. Equity shareholders in APR are kept at the bottom of the hierarchy for recovering all claims and similar to the present regime in  India do not have any right to acquire shares in the restructured entity. [27]

In the United Kingdom, an official hierarchy for granting preferential status during an insolvent liquidation has been mentioned in the Insolvency Act, 1986.[28] Even there, shareholders stand at the bottom of the hierarchy as per the Act and there are no rights for them to acquire shares in the restructured entity. 

C. Existing shareholders become shareholders post restructuring and get the opportunity to participate proportional to their shareholding

The rationale and the primary objective behind the proposal is to protect the interest of minority public shareholders, that is, retail shareholders who lack the expertise and knowledge to predict the markets, which the big institutional investors possess. However, the framework might lead to quite an opposite outcome. The authors have conducted empirical research to demonstrate that in cases of companies staying listed or being re-listed pursuant to their CIRP, their share prices have already fallen to a large extent or/and suffer from extreme volatility and speculative trading.

The Research Methodology

SEBI in the Consultation Paper has provided that pursuant to CIRP, 28 companies have been liquidated, 52 have been delisted pursuant to the approval of the resolution plan and 23 have continued to remain listed. However, SEBI has not provided the date up to which the data has been provided regarding the status of listed companies that have undergone CIRP. Further, there is no separate data for all the listed entities that have undergone/ are undergoing CIRP provided either on IBBI or SEBI’s website. The cumulative data is only available for all CIRPs that have yielded a Resolution Plan as of 30th June 2022 (IBBI Dataset).[29] The IBBI Dataset is available on the website of IBBI and includes the name of the companies, their date of commencement of insolvency, the total amount of admitted claims, among other things. It contains a list of all the companies (listed as well as unlisted) whose CIRP has resulted in yielding a resolution plan since the implementation of the Code till 30th June 2022.

From this dataset, the authors have extracted the list of those listed companies that have stayed listed pursuant to the approval of their resolution plan. This has been done by verifying each company and excluding all those that were either not listed at any time or are no longer listed due to their resolution plan mandating the same. This provided the authors with the list of those companies that have stayed listed pursuant to approval of their resolution plan.

The authors could only gather the names of 16 entities that have stayed listed/relisted pursuant to their CIRP. The reason behind this is that CIRP of certain companies that have stayed listed pursuant to completion of their resolution process might have been completed post 30th June, 2022 due to which they are not present in the Original IBBI Dataset which only provides data up to that date.

Upon the creation of the above list, the authors created a new database  that mentions the current market price of the abovementioned listed entities, their all-time high price, the price on the date of commencement of Insolvency, and the price a year before the commencement of Insolvency (Share Price Dataset). 

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Observations from the Share Price Dataset

From the above dataset, two points can be inferred regarding the level and behaviour of stock prices of companies that have stayed listed pursuant to the completion of their CIRP:-

(i) Out of the 16 companies, the stocks of 7 companies have become penny stocks and have not been able to recover the value of their shareholders even after 4-5 years of approval of their Resolution Plan. The current market price of all of these stocks is below 20 Rs., and they have fallen down 80-90 % from their all-time high.

(ii) Of the remaining 9 companies, 8 have faced extreme volatility and speculative trading. This is due to the relaxation in Minimum Public Shareholding (MPS) norms that are provided for entities post-CIRP. The share prices of these stocks have been extremely volatile.

(Kindly look at the Share Price Dataset for detailed observations regarding the same. In the ‘remarks’ section, important comments have been made based on the datasets that support the conclusion of the authors that buying shares in a company post its insolvency resolution goes against the interests of shareholders)

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Analysis of the observations in the context of the present framework

Most of the stocks of revived entities have become penny stocks, trading below the level of 20 Rs., meaning that most of the wealth of the investors in such companies has already been wiped out. The share price of 7 of the entities is still around the same level as it was during the commencement of insolvency proceedings. This shows that the money of investors is still stuck in those stocks and they have not been able to get any returns.

Further, trading in penny stocks itself is extremely risky and it is suggested that retail investors stay away from such stocks.[30] Buying or investing in stocks that are under/have undergone the process of insolvency resolution is inherently risky and goes against the interests of retail shareholders. As per research on US stock markets, investors, on average, lost 38% of their wealth post-submission of the first resolution plan and the end of the bankruptcy.[31] In most cases, only amateur retail investors buy an insolvent company’s stock, whereas institutional investors who have the relevant expertise and resources to study and understand the business of companies tend to sell their shares of a company’s stock around its insolvency.[32]

     Ordinary retail investors do not possess the relevant knowledge to understand how a company might perform post its restructuring [33]That is to say, most of the present minority shareholders of the insolvent company will be clueless about the company’s future and will most likely buy a stake in the revived entity only based on pure speculation. Predicting the future course of newly revived entities correctly is something that even well-equipped institutional investors might not be able to do, let alone ordinary retail investors.[34] The Share Price Dataset shows how investors have been unable to recover their money even after 4-5 years of the approval of the resolution plans. Hence, if the existing minority shareholders buy a stake in the newly revived entity, it would further expose them to more risk after having already lost most of their capital invested in the old entity. Moreover, the Share Price Dataset also shows how trading in 8 of the companies has been highly volatile, resulting in huge variations in price levels, which is extremely risky for retail investors.

The present framework forces revived entities to stay listed by mandatorily offering a certain percentage of equity to existing minority shareholders. By virtue of staying listed, other retail investors will also start trading in the shares of such companies, who also do not have clarity regarding the future of the company. Since such stocks suffer from extreme volatility, as observed above, and there is no clarity regarding the future of their companies, the overall framework clearly does not bode well for the retail shareholders. Furthermore, the relaxation in minimum public shareholding norms also leads to volatility in entities that have undergone the process of CIRP. For companies that have undergone CIRP, the requirement of a minimum public shareholding of 25% is relaxed, and it is set at 5%, which must be gradually increased to 25%.[35] This low public shareholding is also one of the reasons for increased volatility in such stocks.[36]

D. Existing public shareholders will get an opportunity to acquire capital in the new entity at the same price as that of the RA

It needs to be recognized that even though the framework will give existing public shareholders an opportunity to acquire capital in the new entity at the same price as that of RA, at the same time, it will lead to the dissolving of equity of the RA which the RA might consciously try to avoid. The acquisition of an insolvent firm is a huge risk for the resolution applicant. They would be much more dissuaded from participating in the bid if they wererequired to assume all the risk and offer shares to public shareholders at the same price. The minority shareholders, in the current scenario, lose all their investment in the corporate debtor and have to buy afresh shares in the new entity formed after restructuring to continue their hold.

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IV. THE WAY FORWARD & CONCLUSION

After scrutinising and analysing SEBI's proposal, it is clear that it does more harm than good. The proposed framework by SEBI demonstrates its lack of understanding of the insolvency regime in India. The proposal may be a required and effective one from the point of view of shareholders, however, overall, it does not bode well for the insolvency regime in India.

The framework, if implemented, will negatively impact the environment for insolvency resolution in India by discouraging prospective RAs to bid for insolvent entities. Moreover, from the empirical study, it can be inferred that, more often than not, revived entities have not been able to restore the wealth of the shareholders. Also, stocks of such companies have shown extreme volatility due to the relaxation in Minimum Public Shareholding Norms and are also prone to speculative trading. It is suggested that retail investors should stay away from such stocks as trading and investing in them mostly results in losses only.

Additionally, in the consultation paper, there has been no mention of any consultation between SEBI and IBBI. Proposing such a framework that mandates certain provisions to necessarily be a  part of the submitted resolution plans should have been done only after prior consultations with the insolvency regulator in India. Ajay Tyagi, the former chairperson of SEBI has admitted that the Committee of Creditors (CoC) plays a pivotal role in the overall scheme of insolvency resolution process in order to protect the interests of creditors.[37] Therefore, the framework as proposed by SEBI should not be implemented in the Indian securities regime.

At the same time, certain measures can be suggested which will help in curbing the volatility in stocks of companies undergoing CIRP. Presently, there are provisions such as tagging of stocks of companies under CIRP, ordering brokers to caution investors dealing in such stocks, etc., to protect investors from trading in these stocks.[38] However, the steps undertaken are not sufficient to ensure the desired result.

In 2018, SEBI, in consultation with NSE[39] and BSE[40] had introduced the concept of Additional Surveillance Measures (ASM). The objective behind the introduction of ASM was to check the sudden rise or fall in the prices of certain stocks. Under this, when certain stocks are put under the ASM category, they are subjected to additional surveillance by the stock exchanges. The securities are shortlisted under the ASM mechanism on the basis of factors such as PE ratio, the difference between the high price and low price in a day, market capitalization, and close-to-close price variation, among other things.[41] Once a stock has been put under ASM, various restrictions are imposed on its trading to keep a check on its price. The upper and lower circuits are kept at 5 % each, meaning that the stock cannot rise or fall by more than 5% in a day. Further, margin trading is also disallowed on such stocks to control the volume of shares traded and, as a result, stabilise the price to a certain extent. Since stocks of many companies under CIRP are inherently volatile in nature, various such stocks have also been put under the ASM mechanism upon them being highly volatile.[42]

It is suggested that if a company defaults on its repayments, its stock must be immediately put under the ASM list instead of waiting for it to fulfil the above-mentioned criteria. This is because the next logical step post-default is the initiation of CIRP only, which will lead to more volatility in the stock. Hence, if the stock price can be checked at the stage of default itself, it will keep the share price stable without any large variations in its prices. Further, the level of upper and lower circuits can also be reduced from 5% in such stocks to check the price variations in the stock. Though the above recommendations do not relate to the framework proposed by SEBI, however, if they are implemented, they will at least provide some sort of protection to investors in CIRP stocks from massive losses.

 

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[1] Securities and Exchange Board of India Act, 1992 (SEBI).

[2] SEBI, preamble.

[3]Enhancing Investor Protection, KPMG (Mar. 8, 2023, 7:40 PM)  https://kpmg.com/xx/en/home/insights/2022/08/enhancing-investor-protection.html 

[4] Kuldeep Thareja, Mitu Bhardwaj and Rashmeet Kohli, The changes in SEBI’s complaints redressal system, LiveMint (Mar. 8, 2023, 7:46 PM), https://www.livemint.com/money/personal-finance/the-changes-in-sebi-s-complaints-redressal-system-11673800189840.html.

[5] Ashley Coutinho, Share of retail investors in NSE companies at record high, shows data, Business Standard (Mar. 8, 2023, 7: 48 PM), https://www.business-standard.com/article/markets/share-of-retail-investors-in-nse-companies-at-record-high-shows-data-122020601091_1.html.

[6] Nishant Kumar, Number of domestic investors rises over 32% YoY in 2022; will the trend continue?, LiveMint  (Mar. 8, 2023, 7:50 PM), https://mintgenie.livemint.com/news/markets/number-of-domestic-investors-rises-over-32-yoy-in-2022-will-the-trend-continue-151672302678407

[7] Arunkumar Singh, 8 reasons why retail investment increased during Covid, Moneycontrol (Mar. 8, 2023, 7:55 PM), https://www.moneycontrol.com/news/business/markets/8-factors-why-retail-participation-increased-during-covid-6919421.html

[8] Consultation Paper Framework for protection of interest of public equity shareholders in case of listed companies undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), SEBI (Mar. 8, 2023, 7:50 PM), https://www.sebi.gov.in/reports-and-statistics/reports/nov-2022/framework-for-protection-of-interest-of-public-equity-shareholders-in-case-of-listed-companies-undergoing-corporate-insolvency-resolution-process-cirp-under-the-insolvency-and-bankruptcy-code-ibc-_64850.html. 

[9] Understanding the ibc key jurisprudence and practical considerations, Insolvency and Bankruptcy Board of India (Apr. 20. 2023, 1:56 PM),  https://ibbi.gov.in/uploads/whatsnew/e42fddce80e99d28b683a7e21c81110e.pdf.

[10] Resolving Insolvency methodology, The World Bank (Mar. 8, 2023 8:01 PM),

https://archive.doingbusiness.org/en/methodology/resolving-insolvency

[11] Insolvency and Bankruptcy Code and Bank Recapitalisation, Reserve Bank of India (Mar. 8, 2023, 8:10 PM)https://www.rbi.org.in/scripts/PublicationsView.aspx?id=18060

[12] Uttam Gupta, Under IBC, protecting minority shareholders, The Pioneer (Mar. 8, 2023, 8:10 PM),

https://www.dailypioneer.com/2022/columnists/under-ibc--protecting-minority-shareholders.html.

[13] Priyanka Gawande, Sebi floats paper to protect equity shareholders under IBC, LiveMint (Mar. 8, 2023, 8:12 PM)  , https://www.livemint.com/market/stock-market-news/sebi-floats-paper-to-protect-equity-shareholders-under-ibc-11668110075157.html

[14] supra note 12.

[15] Sreedhar T. Bharath & Amy K. Dittmar, Why Do Firms Use Private Equity to Opt Out of Public Markets?, 23(5) Rev. Financ. Stud. 1771 (2010).

[16]  Kashefi Pour, Eilnaz & Lasfer Meziane, Why do companies delist voluntarily from the stock market?, 37(12) JBF 4850 (2013).

[17] LISTING FEE, BSE (8 Mar., 2023, 9:40 PM), https://www.bseindia.com/Static/about/listing_fees.aspx.

[18] Listing Fees - Main Board, NSE (8 Mar., 2023, 9:40 PM), https://www.nseindia.com/companies-listing/raising-capital-public-issues-listing-fees.

[19] Marosi, András & Nadia Massoud, Why Do Firms Go Dark?, 42(2)  J. Fin. Qual. An. 421 (2007).

[20] Kashefi Pour, Eilnaz & Lasfer Meziane, Why do companies delist voluntarily from the stock market?, 37(12) JBF 4850 (2013).

[21] Insolvency and Bankruptcy Code 2016, s 53 (IBC).

[22] Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021, SEBI (8 Mar., 2023, 9:40 PM), https://www.sebi.gov.in/legal/regulations/aug-2021/securities-and-exchange-board-of-india-delisting-of-equity-shares-regulations-2021-last-amended-on-august-3-2021-_50517.htm.

[23] 2020 SCC OnLine SC 1192.

[24] Swiss Ribbons (P) Ltd. v. Union of India, (2019) 4 SCC 17.

[25] 2019 SCC Online SC 257.

[26] US Bankruptcy Code 1978, s 1129(b)(2) (US).

[27] Absolute Priority Rule, Wall Street Prep (8 Mar. 2023, 2:47 PM),  https://www.wallstreetprep.com/knowledge/absolute-priority-rule-apr-priority-of-claims-waterfall/.

[28] Insolvency Act 1986 (UK).

[29] Insolvency and Bankruptcy Board of India Corporate Insolvency Resolution Processes Yielding Resolution Plans, (8 Mar., 2023, (10:00 PM),  https://ibbi.gov.in/uploads/whatsnew/2022-09-15-180413-adctw-317ab3c35a84d4cfa9619bceda795d9b.pdf.

[30] Equity Master, ‘Retail investors are buying penny stocks. Here’s why you should not follow them’ (Livemint, 16 June 2022), <https://www.livemint.com/market/stock-market-news/retail-investors-are-buying-penny-stocks-here-s-why-you-should-not-follow-them-11655363381332.html > accessed 8 March 2023.

[31] Jeff Hubbard & Kevin Stephenson, Bankrupt Stocks, Reorganization Plans and Market Efficiency: Are Bankrupt Stocks Overpriced?, 37 Q. Rev. Econ. & Fin. 27 (2016). ; Yuanzhi Li & Zhaodong Zhong, Investing in Chapter 11 Stocks: Trading, Value, and Performance’ 16(1) J. Fin. Mkts. 33  (2013).

[32] Yons A. Kornsgold, Beginner’s Luck that Hertz: Bankrupt Companies and the Trap for Retail Investors, 2021(2), Colum. Bus. L. Rev. 914, (2021).

[33] Id at 938

[34] Id.

[35] SEBI, Securities Contracts (Regulation) (Amendment) Rules, 2021 (Jun. 18, 2021) <https://www.sebi.gov.in/legal/rules/jun-2021/securities-contracts-regulation-amendment-rules-2021_50642.html>

[36] Volatility in shares relisting after insolvency process must be checked, The HinduBusinessLine (18 Apr. 2023, 1:36PM),  https://www.thehindubusinessline.com/opinion/editorial/volatility-in-shares-relisting-after-insolvency-process-must-be-checked/article32414805.ece .  

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[38] Samie Modak, Exchanges announce host of safeguards for investors in cos under IBC,  Business Standard (8 Mar. 2023, 10:08 PM), https://www.business-standard.com/article/markets/exchanges-announce-host-of-safeguards-for-investors-in-cos-under-ibc-121070901045_1.html. 

[39] Additional Surveillance Measure, NSE (8 Mar. 2023, 10:12 PM), https://www.nseindia.com/companies-listing/raising-capital-public-issues-listing-fees.

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[41] id.

[42] Kshitij Anand, Don’t panic if you are stuck with stocks under ASM! Here's how it will impact you , Moneycontrol (8 Mar., 2023, 10:21 PM), https://www.moneycontrol.com/news/business/stocks/dont-panic-if-you-are-stuck-with-stocks-under-asm-heres-how-it-will-impact-you-2588113.html.