Question

Q. Which of the following statement is incorrect regarding the Special Purpose Acquisition Company (SPAC)?

• A.
  It is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company.
• B.
  It is also known as a blank check company.
• C.
  When the SPAC raises the required funds through an IPO, the money is held in a trust until a predetermined period elapses or the desired acquisition is made.
• D.
  Recently RBI has formed an expert group to examine the feasibility of SPAC in India.

Answer 1

The correct option is D

Recently RBI has formed an expert group to examine the feasibility of SPAC in India.
Explanation:

Option (a) is correct: A special purpose acquisition company (SPAC) is a company with no commercial operations that is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company.

Option (b) is correct: They are also known as "blank check companies,"

Option (c) is correct: When the SPAC raises the required funds through an IPO, the money is held in a trust until a predetermined period elapses or the desired acquisition is made.

Option (d) is incorrect: Recently SEBI has formed an expert group to examine the feasibility of SPAC in India.