MCQs On SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

Q.1:- “frequently traded shares” means shares of a target company, in which the traded turnover on any stock exchange during the twelve calendar months preceding the calendar month in which the public announcement is made, is of the total number of shares of such class of the target company:

• at least fifteen per cent
• at least twenty per cent
• at least ten per cent
• at least five per cent

Q.2:- No acquirer, has acquired and holds in shares or voting rights in a target company entitling them to exercise of the voting rights in the Target company but less than the maximum permissible non­ public shareholding, shall acquire within any financial year additional shares or voting rights in such target company entitling them to exercise of the voting rights, unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company in accordance with these regulations:

• Twenty-five per cent or more/more than five per cent
• Twenty-five per cent or more/more than three per cent
• Fifteen per cent or more/more than one per cent
• Twenty per cent or more/more than two per cent

Q.3:- Where an acquirer has acquired shares of the target company in the preceding L, I without attracting the obligation to make a public announcement of an open offer, he shall not be eligible to voluntarily make a public announcement of an open offer for acquiring shares:

• Twenty six weeks
• Fifty-two weeks
• Thirteen weeks
• None of the above

Q.4:- What are the obligations on the part of the manager to the open offer prior to the public announcement being made:

• To ensure that the acquirer have made firm arrangements for funds through verifiable means to meet the payment obligations under the open offer
• To ensure that the acquirer is able to implement the open offer
• Both A and B
• None of the above

Q.5:- The obligation to make a public announcement of an open offer for acquiring shares shall be considered as:

• An indirect acquisition of shares of the target company
• A cross acquisition of shares of the target company
• A hostile takeover of shares of the target company
• A direct acquisition of shares of the target company

Q.6:- “acquirer” means any person who:

• voting rights
• control over a target company
• acquires shares
• all of the above

Q.7:- For acquisition or holding of shares or voting rights in a target company, the acquirer have to make:

• To display his intention to acquire the shares of target company in social media.
• A private announcement of such intention
• A public announcement of an open offer
• To send individual communication to the shareholders of the target company

Q.8:- An open offer is required to be kept open for how many days:

• Ten working days
• Ten days
• Five days
• Five working days

Q.9:- The acquisition shall be regarded as a direct acquisition of the target company, where:

• The proportionate sales turnover of the target company as a percentage of the consolidated sales turnover of the entity or business being acquired
• The proportionate market capitalisation of the target company as a percentage of the enterprise value for the entity or business being acquired
• The proportionate net asset value of the target company as a percentage of the consolidated net asset value of the entity or business being acquired
• All/Either of the options are correct

Q.10:- No acquirer shall acquire shares or voting rights in a target company which taken together with shares or voting rights, if any, held by him and by persons acting in concert with him in such target company, entitle them to exercise ______in such target company unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company in accordance with these regulations:

• 20% or more of the voting rights
• 25% or more of the voting rights
• 10% or more of the voting rights
• 15% or more of the voting rights

Q.11:- Who can be acquirer:

• It can be a corporate entity
• It can any other legal entity
• It can be a natural person
• All of the above

Q.12:- Maximum number of shares which can be held by promoters in a listed company is :

• 75% of share capital
• 70% of share capital
• 60% of share capital
• 50% of share capital

Q.13:- “volume weighted average market price” means:

• (No. of equity shares traded on a stock exchange * Price of each equity p & share)/Total No. of equity shares traded '' on the stock exchange
• (No. of equity shares traded on a stock exchange * Average Price of each equity share)/Total No. of equity shares traded on the stock exchange
• (No. of equity shares traded on a stock exchange * Price of each equity share)/Total No. of equity shares issued by the Company
• None of the above

Q.14:- Control means:

• Control the management
• Policy decisions exercisable by a person or persons acting individually or in concert
• Right to appoint majority of the directors
• All/any of the options

Q.15:- The market capitalisation of the target company shall be taken into account on the basis of the of such shares on the stock exchange for a period of sixty trading days preceding the earlier of, the date on which the primary acquisition is contracted, and the date on which the intention or the decision to make the primary acquisition is announced in the public domain.

• Weighted average market price
• Volume-weighted average market price
• Average market price
• None of the above

Q.16:- No person shall make a public announcement of an open offer for acquiring shares:

• who is not a wilful defaulter
• who is a defaulter
• who is not a defaulter
• who is a wilful defaulter

Q.17:- Whether a shareholder once tendered his shares in the open offer made by the acquirer can withdraw his request:

• cannot withdraw
• Yes, he withdraw
• He can withdraw, if the acquirer permits so
• None of the above

Q.18:- In the event the acquirer makes a public announcement of an open offer for acquiring shares of a target company in terms of regulations 3, 4 or 5, he may delist the company in accordance with provisions of the:

• SEBI (SAST) Regulations, 2011
• SEBI (Delisting of Equity Shares) Regulations, 2009
• SEBI (LODR) Regulations, 2015
• SEBI (ICDR) Regulations, 2009

Q.19:- An acquirer, who together with persons acting in concert with him, holds shares or voting rights in a target company entitling them to exercise shall be entitled to voluntarily make a public announcement of an open offer for acquiring shares:

• 25% or more but less than the maximum permissible non-public shareholding
• 15% or more but less than the maximum permissible non-public shareholding
• 30% or more but less than the maximum permissible non-public shareholding
• 20% or more but less than the maximum permissible non-public /shareholding

Q.20:- “wilful defaulter” means any person who is categorized as a wilful defaulter by any bank or financial institution or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the____________ and includes any person whose director, promoter or partner is categorized as such:

• Security Exchange Board of India
• Ministry of Corporate Affairs
• Institute of Chartered Accountants of India
• Reserve Bank of India

Q.21:- In the event of the failure of the delisting offer made by the acquirer, through the manager to the open offer, shall from the date of the announcement under Regulation 5A(2), file with the Board, a draft of the letter of offer:

• within ten working days
• within twenty working days
• within five working days
• within fifteen working days

Q.22:- “enterprise value” means:

• The value calculated as market capitalization of a company plus debt, minority interest and preferred shares, minus total cash and cash equivalents
• The book value of a company plus debt, minority interest and preferred shares, minus total cash and cash equivalents
• The intrinsic value of assets of a company plus debt, minority interest and preferred shares, minus total cash and cash equivalents
• The market value a company plus debt, minority interest and preferred shares, minus total cash and cash equivalents