Companies Act, 1973 (Act No. 61 of 1973)The Securities Regulation Code on Takeovers and MergersThe CodeSection I. Conduct during the OfferRule 19. Restrictions on Frustrating Action |
During the course of an offer, or even before the date of the offer if the board of the offeree company has reason to believe that a bona fide offer might be imminent, the board shall not, except in pursuance of a contract entered into earlier, without the approval of the holders of relevant securities in general meeting -
| a) | issue any authorised but unissued securities; |
| b) | issue or grant options in respect of any unissued securities; |
| c) | create or issue, or permit the creation or issue of, any securities carrying rights of conversion into or subscription for other securities; |
| d) | sell, dispose of or acquire, or agree to sell, dispose of or acquire, assets of a material amount; |
| e) | enter into contracts otherwise than in the ordinary course of business; |
| f) | pay any dividend which is abnormal as to timing and amount. |
The notice convening the general meeting of holders of relevant securities shall include information about the offer or anticipated offer.
Where it is believed that an obligation or other special circumstance already exists, although a formal contract has not been entered into, the Panel shall be consulted and its consent obtained to proceed without a meeting of the holders of the relevant securities.