Exit Related Issues
(a) The provisions under the Companies Act for a buyback of securities need to be amended as under: 24 months probation period for fresh issue of capital to be reduced to six months in the case of unlisted companies where the buyback of shares is from VC investors; negotiated deals be permitted in unlisted companies here one of the parties to the deal is a venture capital investor, permit VCC VCU to redeem its equity preference shares to an extent of 100 per cent of their paid up capital out of the sale proceeds of investment and assets and not necessarily out of free reserves, securities premium account or the proceeds of fresh issue should apply to them.
(b) The VCF, while exercising its call or put option as per the terms of agreement, should be exempt from applicability of SEBI takeover code and 1969 circular under Section 16 of SC(R)A issued by the Government of India.
(c) The existing requirement under the SEBI (initial public offer) guidelines for a track record of three years of profit should be relaxed in the case of the companies funded by VCFs and also in the case of companies whose shares are already listed on stock exchanges outside India.
(d) The VCFs joint promoters should be eligible as qualified investors to participate in the unlisted equity segment of the OTCEI or any other stock exchange permitted by SEBI.
(e) In the case of transfer of securities by VCFs to any other person, the requirement of obtaining a no objection certificate (NOC) from a joint venture partner or other shareholders should be dispensed with.