Promoters Contribution Before Public Issue
Promoters should bring in the full amount of contribution, including premium, at least one day before the public issue opens/issue opening date, which would be kept in escrow account with a bank and would be released to the company along with the public issue proceeds. However, where the promoters contribution has been brought prior to the public issue and has already been deployed, the company should disclose the use of such funds in the cash now statement of the offer document. Where, however, it exceeds Rs 100 crore, Rs 100 crore should be brought prior to the opening of the issue and the remaining in advance on prorate basis before calls are made on the public. The shares/ convertible securities would be allotted to promoters against money received through a resolution of the board of directors. A copy of the resolution, along with a chartered accountant’s certificate to the effect that the promoters contribution has been brought in. should he filed with the SEBI before the opening of the issue. This certificate should also be accompanied by names and addresses of friends, relatives and associates who have contributed to the promoters quota, along with the amount of subscription made by each of them.