Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
Section 7. Issue of security by raising of receipts or funds by securitisation company or reconstruction company
(1) Without prejudice to the provisions contained in the Companies Act, 1956 (1 of 1956), the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and the Securities and Exchange Board of India Act, 1992 (15 of 1992), any securitisation company or reconstruction company, may, after acquisition of any financial asset under sub-section (1) of section 5, offer security receipts to qualified institutional buyers (other than by offer to public) for subscription in accordance with the provisions of those Acts.
(2) A securitisation company or reconstruction company may raise funds from the qualified institutional buyers by formulating schemes for acquiring financial assets and shall keep and maintain separate and distinct accounts in respect of each such scheme for every financial asset acquired out of investments made by a qualified institutional buyer and ensure that realisations of such financial asset is held and applied towards redemption of investments and payment of returns assured on such investments under the relevant scheme.
1[(2-A)(a) The scheme for the purpose of offering security receipts under sub-section (1) or raising funds under sub-section (2), may be in the nature of a trust to be managed by the securitisation company or reconstruction company, and the securitisation company or reconstruction company shall hold the assets so acquired or the funds so raised for acquiring the assets, in trust for the benefit of the qualified institutional buyers holding the security receipts or from whom the funds are raised.
(b) The provisions of the Indian Trusts Act, 1882 (2 of 1882) shall, except insofar as they are inconsistent with the provisions of this Act, apply with respect to the trust referred to in clause (a) above.”]
(3) In the event of non-realisation under sub-section (2) of financial assets, the qualified institutional buyers of a securitisation company or reconstruction company, holding security receipts of not less than seventy-five per cent of the total value of the 2[security receipts issued under a scheme by such company], shall be entitled to call a meeting of all the qualified institutional buyers and every resolution passed in such meeting shall be binding on the company.
(4) The qualified institutional buyers shall, at a meeting called under subsection (3), follow the same procedure, as nearly as possible as is followed at meetings of the board of directors of the securitisation company or reconstruction company, as the case may be.
1. Sub Sec. (2-A) Inserted by Act No. 30 of 2004 w.e.f. 29-12-2004.
2. Subs. by Act No. 30 of 2004 w.e.f. 29-12-2004.