1. Where certain members of a company propose, in consultation with the Board of Directors to offer, in accordance with the provisions of any law for the time being in force, whole or part of their holding of shares to the public, they may do so in accordance with such procedure as may be prescribed.
2. Any document by which the offer of sale to the public is made shall, for all purposes, be deemed to be a prospectus issued by the company and all laws and rules made there under as to the contents of the prospectus and as to liability in respect of mis-statements in and omission from prospectus or otherwise relating to prospectus shall apply as if this is a prospectus issued by the company.
3. The members, whether individuals or bodies corporate or both, whose shares are proposed to be offered to the public, shall collectively authorise the company, whose shares are offered for sale to the public, to take all actions in respect of offer of sale for and on their behalf and they shall reimburse the company all expenses incurred by it on this matter.
Legal Commentary & Landmark Judgments: Section 28
Section 28 provides the statutory mechanism for an 'Offer for Sale' (OFS) of shares by existing members of a company to the public, establishing the company's role as agent and reimbursement of costs.
In drafting Offer for Sale Agreements (OFSA) in IPOs, include explicit indemnification clauses ensuring that selling shareholders reimburse all underwriting, regulatory, and marketing expenses to the company under Section 28(3) prior to listing day.