Mumbai, Jan. 12 Mastek Ltd can embark on a fresh buyback programme this fiscal, a SEBI clarification to the company has said.
The company had sought SEBI’s views on embarking on a buyback programme (for 10 per cent stake) in view of the fact that it has just completed a buyback amounting to 25 per cent of the paid-up capital.
SEBI’s explanation was that Mastek had completed 14 per cent of its first buyback programme in 2007-2008. The remaining portion constituting 11 per cent stake was bought back in 2008-2009. Considering that Mastek has fiscal year ending June, the company could go ahead with its plans for an additional 10 per cent buyback, said SEBI.
According to the provision of Section 77 A(2)(b) of the Companies Act, a company cannot buy back more than 25 per cent of its share capital and free reserves within a financial year.
“It is observed that the company has bought back 11 per cent of the share capital and free reserves within the financial year 2008-09. Thus the limit of 25 per cent of the share capital and free reserves has not been reached in the financial year 2008-09,” said SEBI.
