What is the call option (right to demand sale) on a convertible bond, and what limits apply?

A call option is the right of the issuer or a person it designates to demand that bondholders sell the convertible bond at a set price; the regulations call it a 'convertible bond purchase option', and in practice it is also called a right to demand sale.

When a listed company grants this right to its largest shareholder or their specially related persons (including when the company sells convertible bonds it has acquired to them), the bond must carry a condition preventing them from acquiring, through the call option, shares in excess of their respective shareholding ratios at the time of issuance. This limit was introduced by a 2021 amendment to keep the call option from being used as a way for the largest shareholder to increase its stake.