This document provides definitions and explanations related to takeovers and the Takeover Code in India. It defines key terms like acquirer, control, shares, promoter, person acting in concert, target company. It summarizes regulations around disclosures for acquisition of shares above certain thresholds and the requirement for open offers when acquisition of shares takes the holding above certain levels like 15% and 55%. It also discusses judgements around interpretation of some of these terms.
OBJECTIVE
Merger and Amalgamation (M&A) is one of the forms of Corporate Restructuring. M&A transactions are generally done to diversify the business, reduce competition, exercise increased scale of operations, to focus on core businesses to streamline costs and improve profit margins, etc. Provisions for merger and amalgamation under Companies Act, 2013 also includes demerger. The webinar deals with the provisions of merger and amalgamation enshrined in Companies Act, 2013 read with Rules made there under, legal formalities involved and judicial precedents.
OBJECTIVE
Merger and Amalgamation (M&A) is one of the forms of Corporate Restructuring. M&A transactions are generally done to diversify the business, reduce competition, exercise increased scale of operations, to focus on core businesses to streamline costs and improve profit margins, etc. Provisions for merger and amalgamation under Companies Act, 2013 also includes demerger. The webinar deals with the provisions of merger and amalgamation enshrined in Companies Act, 2013 read with Rules made there under, legal formalities involved and judicial precedents.
SEBI (SAST) Regulations, 2011 provides that whenever an acquirer acquires the shares/voting rights in excess of the threshold or control over the Target Company as prescribed under regulation 3, 4 and 5 of SEBI Takeover Regulations, then the acquirer is required to make a public announcement of offer to the shareholders of the Target Company. However, Regulation 10 of the SEBI (SAST) Regulations, 2011 provides the automatic exemption...
It is comprehensive Presentation covering all the aspects of Takeover defenses like
Active Takeover Defense and Preventive Take over Defense
Hope you enjoy reading it as much as i enjoyed working it
EXTRACT OF THE PRESENTATION - FOR THE CASE LAWS COVERED IN THE SESSION & SEMINARS, FEEL FREE TO EMAIL ME.
SPECIAL THANKS TO CS SHAILASHRI BHASKAR MA'AM, CS PAVAN KUMAR VIJAY SIR FOR THEIR GUIDANCE.
Related Party Transaction as per Companies Act and SEBI(LODR)CS Bhuwan Taragi
This PPT is on Related Party Transaction as per companies Act, 2013 and SEBI(LODR) 2015. you will company know who are related parties and what are approval required for related parties transactions.
You can visit my you tube channel "CS Bhuwan Taragi- The Law Talks " for more clearity on this topic.
SEBI Guidelines for Merger and Acquisition.
SEBI (Security Exchange Board of India)
Merger - Combination of two companies
Acquisition - When one company purchase most or all the company assets/shares.
Guidelines - Government body described some rules and regulations to follow.
Related Party Transactions: Disclosure & TransparencyPavan Kumar Vijay
It deals with the concept and need of disclosures and transparency in corporate affairs. It further enumerates the provisions of related party transactions and insider trading.
How to Begin Secretarial Audit (Compliance of All Applicable Law )Pavan Kumar Vijay
My Presentation at ICSI on 13/03/2015- "How to Begin- Secretarial Audit".
Secretarial Audit is a process to check compliance with –
• the provisions of various laws and Rules/Regulations/Procedures,
• maintenance of books, records etc,
• by an independent professional to ensure that the company has complied with the legal and procedural requirements and also followed due processes.
• the Board of Directors has to give explanation in the Board’s Report to every qualification and observation or other adverse remark made by the Secretarial Auditor.
•So we can say that the Board of Directors has to ensure that there should be a system in the company through which Compliance Officer can Control on all compliances under all applicable Laws.
Read more...
Company Secretaries- Adding Value through TechnologyPavan Kumar Vijay
With the advancement of IT and Internet-based systems and tools, the scope of corporate and legal consultancy has widened; we can easily provide services to bigger and global clients. But the competition will also be with global players. So Company Secretaries have to learn and adapt new technologies to provide speedy solutions with collaboration of Human Intelligence and Internet based knowledge.
Corporate Governance is not only a legal compliance but is necessary for the optimum growth of a business. A transparent and well-governed company is perceived to be doing business in honest way and contributing in the development and wellness of society. Therefore businesses should adapt system of Corporate Compliance Management to establish and maintain Ethics, Integrity and Accountability in their routine. सत्यं वद, धर्मं चर (Forever Speak the Truth and Follow the Dharma) has been the mantra of good people and same applies to Corporate and Business.
Today I was at Assocham’s 2nd National Conference on Corporate Compliance Management to give my view on the quest for Corporate Governance and necessity of Corporate Compliance Management.
With resolution of Central Government for reforms, transparency and governance in Corporate Sector, sentiments in the Capital Market has turned positive. Companies Act 2013 has also helped in reinstating the confidence of small shareholders in Capital Market.
As the capital market has grown global, it has generated ample need and huge opportunities for pools of ready money for investments in specific sectors. In such a scenario, several new Investor and Market friendly laws like AIF/ REITs and InvIT have been introduced. SEBI has also recently simplified some norms of AIFs. These type of funds will help in rapid development and growth of various sector of the country.
Corporate Governance is the practice of transparency in operations and transactions expected from Corporate Houses. सत्यं वद, धर्मं चर (Forever Speak the Truth and Follow the Dharma) has been our old age mantra for high standard of living and governance practices. To imbibe Corporate Governance norms in the structure of a business, leaders have to have vision and inclination towards Ethics, Integrity and Accountability. History has shown that Companies who followed these practices have earned the faith of world at large. Well governed and transparent companies have fared well in their business and also contributed to maintain the inclusive development and growth of society.
Hostile Takeover Strategies with Analysis of Case StudiesPavan Kumar Vijay
Hostile Takeover, acquisition of a business by making unsolicited bids and giving attractive offers to the stakeholders to amass the controlling share and then bid to take control of the business and the management. The acquirer attempts to acquire a business by convincing small shareholders and financial institution of bright future prospects and also give them much larger premium for their shares. This is done to get an upper hand in that specific segment of Industry as well as market by acquiring an established business with proven track records.
How much negative this kind of takeover may look, there are many positive outcomes too. A bid of hostile takeover compels the management to work efficiently, true value of a business comes to fore, shareholders get an opportunity to sell their stake at a good premium etc.
Fundraising for businesses was an arbitrary practice without any formal guidelines and regulations before Companies Act 2013. Due to lacunae of legal provisions in Companies Act 1956, many a times, corporate with fraudulent mindset have found their way to dupe investors and public of their hard-earned money. It has created many legal disputes and controversies.
Now, new Companies Act and the consequent rules have formally covered all the modes of fund-raising and have tried to fill in the loopholes of old law. Stringent rules and cumbersome compliances are to ensure safeguard of the public money and restrict the malpractices. But these provisions have created confusion in respect of implementation and compliances. The easy availability of funds for businesses in real need has also dried up. MCA must come out some clarification to give breathing time to companies specifically for private companies.
Technology: Challenges and Opportunities for Company SecretaryPavan Kumar Vijay
Technology and mainly Information Technology has made the knowledge available in digital form and we have easy access to information for reference at any time. This brought both challenges and opportunities for the professionals like Company Secretaries.
As the law has permitted the use of IT in many procedures such as compliance, payments etc., it also expects proficiency in knowledge and efficiency in work from the professionals. Now the mantra of survival and success of a Company Secretary is proper application and management of knowledge, resources and time to compete. There is limitless scope of expanding the horizon for the profession.
Corporate Governance - Initiatives and AccountabilityPavan Kumar Vijay
I gave a lecture at ICSI on GOVERNANCE - Initiative and Accountability.
I believe that Corporates are expected to use their Capacity, Knowledge and Resources towards Maximization of stakeholders' value and well-being and progress of humankind.
There are four parts of this presentation-
1. Strengthening Board Framework
2. Stakeholder Interest Protection
3. Transparency and Disclosure
4. Impact of Change
What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
What are the main advantages of using HR recruiter services.pdfHumanResourceDimensi1
HR recruiter services offer top talents to companies according to their specific needs. They handle all recruitment tasks from job posting to onboarding and help companies concentrate on their business growth. With their expertise and years of experience, they streamline the hiring process and save time and resources for the company.
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
As a business owner in Delaware, staying on top of your tax obligations is paramount, especially with the annual deadline for Delaware Franchise Tax looming on March 1. One such obligation is the annual Delaware Franchise Tax, which serves as a crucial requirement for maintaining your company’s legal standing within the state. While the prospect of handling tax matters may seem daunting, rest assured that the process can be straightforward with the right guidance. In this comprehensive guide, we’ll walk you through the steps of filing your Delaware Franchise Tax and provide insights to help you navigate the process effectively.
2. What is meant by Takeovers & Substantial Acquisition ?
3. When an "acquirer" takes over the “control” of the "target company", it is termed as Takeover. When an acquirer acquires " substantial quantity of shares or voting rights" of the Target Company, it results into substantial acquisition of shares.
5. OR OR ANY PERSON INDIRECTLY DIRECTLY ACQUIRES WHO OR AGREES TO ACQUIRE SHARES VOTING RIGHTS CONTROL OR OR ALONGWITH WITH PAC BY HIMSELF IN TARGET COMPANY EITHER Reg 2 (b) ACQUIRER…
6. JUDGEMENTS OF SAT MATTER OF DEBATE WHETHER WORD ‘ACQUIRER’ IN REGULATION 2(B) MEANS ONLY A PERSON WHO HAS ALREADY ACQUIRED SHARES? HELD No, not only a person who has actually acquired the shares will come in the definition of acquirer but also a person who ‘agrees to acquire shares or voting rights’ or ‘agrees to acquire control over the target company’ will come within the definition of ‘acquirer’. Supreme Court Decision in B.P Amoco PLC VS SEBI
7. QUERIES ON TAKEOVER CODE When a person is said to have acquired the shares? On instruction for purchase order On payment of consideration On receipt of shares On registration of shares in the name of acquirer ACQUISITION OF SHARES
9. OR OR OR OR Reg 2 (c) CONTROL Right to Appoint Majority of Directors Control of Management Control of Policy Decisions EXERCISABLE INDIVIDUALLY + PAC DIRECTLY INDIRECTLY OR BY VIRTUE OF Shareholding MGT Right S/H Agmt Voting Agmt INCLUDES CONTROL
10.
11. RESTRICTION ON ACQUISITION OF CONTROL Reg 12 ACQUISITON OF CONTROL IRRESPECTIVE OF ACQUISITON OF SHARES OR VOTING RIGHTS NO ACQUIRER SHALL ACQUIRE CONTROL WITHOUT MAKING A PUBLIC ANNOUNCEMENT EXEMPTION FROM MAKING A PUBLIC ANNOUNCEMENT: IF CHANGE IN CONTROL HAS TAKEN PLACE IN PURSUANCE TO A SPECIAL RESOLUTION SPECIAL RESOLUTION SHOULD BE PASSED BY POSTAL BALLOT ONLY
13. OR Reg 2 (e) PERSONS SHARES OR VOTING RIGHTS CONTROL WHETHER COMMON PURPOSE AGREEMENT UNDERSTANDING OR who for a Person Acting In Concert OR DIRECTLY INDIRECTLY FORMALLY INFORMALLY Acquire or Agree to acquire PURSUANT TO AN
14. JUDGEMENTS OF SAT PAC MATTER OF DEBATE WHETHER INFORMAL AGREEMENT IS SUFFICIENT TO CONSTITUTE PAC HELD IT WAS HELD THAT EVEN AN INFORMAL AGREEMENT BETWEEN PERSONS TO ACT COLLECTIVELY WILL COVER THEM IN THE DEFINITION OF PAC. AASTHA BROADCASTING NETWORK LTD VS SEBI
16. Reg 2 (e) Contd. Deemed Person Acting In Concert A Company with its Holding or Subsidiary or Co. under Same Mgmt either individually or together with each other. A Co with any of its directors/ Financial Head Director & their associates of Companies mentioned in A Mutual Fund with Sponsor / Trustee / AMC FII’s with sub-accounts Merchant Bankers with their Clients
17. Reg 2 (e) Contd. Deemed Person Acting In Concert Venture Capital Funds with Sponsors Banks with Financial Advisors Stock Brokers of the Acquirer Holding, Subsidiary or Relative of the acquirer Investment Companies with Interested Directors, Fund Managers & Trustees Portfolio Managers with their Cleints
18. JUDGEMENTS OF SAT PAC MATTER OF DEBATE Whether to be a person acting in concert one need to be a relative? HELD No, to be a person acting in concert one need not be a relative; even strangers can act in concert and test is as to whether there is a commonality of objective and community of interest. SAT decision in Kishore Rajaram Chhabria vs. SEBI
19. SC decision in Modi Spg & Wvg Mills Co Ltd Vs SEBI Where a promoter is interested in selling off his shareholding, can he be treated as person acting in concert with another co-promoter who is interested in acquiring shares? Where a promoter did not share common objective or purpose of acquirers inasmuch as it was not interested in acquiring further shares but, on the contrary, was interested in selling off its shareholding in Target Company with a view to meet its financial obligations, it must be held that such promoter was not acting in concert with acquirers. HELD MATTER OF DEBATE
23. Any person in control of the company Reg 2 (h) Any person named as Promoter in any Offer Document OR Shareholding Pattern Whichever is later Promoter PROMOTER means..
24. PROMOTER includes… X Ltd. (Promoter) H Ltd. (Holding company) S Ltd. (Subsidiary company) (Any company in which X Ltd. holds more than 10% ) (Any company which holds more than 10% of X Ltd.) Y Ltd. (Target Company) (A group of individuals or companies or combination thereof holding 20% of the share capital of Y Ltd.) (Any company in which such group holds more than 20% for the share capital.) Promoter Promoter Where promoter is a body corporate
25. PROMOTER includes… Promoter Where promoter is an individual Promoter A (Promoter) A’s Spouse X (Any parent, brother, sister or child of A) X’s Spouse A firm or HUF in which promoter and his immediate relative’s share is more than 10% X Ltd. (A company which 10% or more of the share capital is held by the promoter or an immediate relative of the promoter or a firm or HUF in which the promoter or any one or more of his immediate relative is a partner or member) Y Ltd. (Any company in which X Ltd. holds more than 10%)
26. JUDGEMENTS OF SAT JUDGEMENTS OF SAT MATTER OF DEBATE WHETHER A PROMOTER CAN BE AN ‘ACQUIRER’? HELD NAAGRAJ GANESHMAL JAIN VS SEBI IT WAS HELD THAT ACQUISITION OF CONTROL AND ACQUISITION OF SHAREHOLDING ARE DIFFERENT. THEREFORE, EVEN IF PROMOTER IS ALREADY HAVING CONTROL IF ACQUIRER FURTHER SHARES, HE WILL TREATED AS ACQUIRER. PROMOTER
27. Promoter Comparative Study Who is named as Promoter in any Offer Document OR Shareholding Disclosure Whichever is later Person or Persons named as promoter in any offer document of offer of securities to the public or existing shareholder. Person in control Person in control directly or indirectly Definition After 30.12.2004 Definition Before 30.12.2004
28. Comparative Study Contd. Promoter No Change Firm or HUF in which P/R is partner or coparcener ; stake not < 50% Any Co. 26% stake hold by promoter + relative Any company controlled by Promoter or Relative His Spouse, parents, Brothers, Sisters or Children His relatives as Defined u/s 6 of Co. Act 1956. When person is individual Definition After 30.12.2004 Definition Before 30.12.2004
29. Comparative Study Contd. Promoter No Change Firm or HUF in which P/R is partner or coparcener ; stake not < 50% Any Co. 26% stake hold by promoter + relative Any company controlled by P/R No Change Holding & Subsidiary When person is body corporate Definition After 30.12.2004 Definition Before 30.12.2004
31. Shares Reg 2 (k) Shares carrying voting rights Security which would entitle the holder to receive shares with voting rights BUT Shall Not Include Preference Shares SHARES means…
32. JUDGEMENTS OF SAT JUDGEMENTS OF SAT MATTER OF DEBATE WHETHER PARTLY PAID UP SHARES ARE CONSIDERED AS SHARES IN TAKEOVER CODE? HELD LUXURY FOAMS & OTHERS VS SEBI IT WAS HELD THAT PARTLY PAID SHARES ARE ALSO SHARES UNDER TAKEOVER CODE AS VOTING RIGHTS IS EMBEDDED IN THOSE PARTLY PAID UP SHARES. SHARES
33. QUERIES ON TAKEOVER CODE Shares A company whose share call money is pending on certain shares and it wants to forfeit shares for non-payment of the amount called. Further it wants to reissue these forfeited shares. But finds no takers for such shares. Consequently Board decides to reissue it to any promoter. Shall such transaction amount to acquisition of shares and subject to takeover code? The number of shares to be forfeited is more than 5%.
34. QUERIES ON TAKEOVER CODE SHARES In case where partly paid shares are to be transferred from one promoter to another, what shall be the voting right attached to shares? Would it be voting rights attached to the paid up portion of the share value only. And during such transfer how the acquisition % of shares shall be counted?
36. Acquisition of shares beyond the limit of 5%, 10%, 14%, 54% & 74% of total capital Acquisition 15% or more shares Or 5% or more shares by a person already holding 15%-75% Or 1 share by a person already holding 55%-75% Substantial Quantity of shares or voting rights is defined distinctly for two different purposes: For the purpose of making disclosures For the purpose of making open offer
37. OBJECT OF SEBI TAKEOVER REGULATIONS… TO PROTECT THE INTEREST OF INVESTORS TO MAKE BULK ACQUISITION OF SHARES AND TAKEOVER TRANSPARENT TO ENSURE THAT THE BENEFITS THEREOF ARE AVAILABLE TO OTHER SHAREHOLDERS IN THE TARGET COMPANY.
38. Reg 6 ( 1 & 3 ) TRANSITIONAL PROVISION Initial Disclosures by Persons COMPANY No. & % of shares / voting rights held by him with PAC Promoter / Person having control over a company Within 2 months i.e. (by 20.04.97) of notification of these Regulations (20.02.97) COMPANY His aggregate shareholding in that company Any Person holding more than 5% of shares or voting rights in the company Time Period To whom Particulars of disclosure By whom
39. Reg 6 ( 2 & 4 ) TRANSITIONAL PROVISION Initial Disclosures by Company All Stock Exchanges, where its shares are listed Names, Address, No & % of shares or voting rights of promoters and persons having control Company whose shares are listed on a stock exchange Within 3 months i.e. (by 20.05.97) of notification of these Regulations (20.02.97) All Stock Exchanges, where its shares are listed Aggregate number of shares held by each such person Company in which any person holds more than 5% of its shares/ voting rights Time Period To whom Particulars of disclosure By whom
40. Reg 8(1& 2) Yearly Disclosures by Persons CONTINUAL DISCLOSURES COMPANY No. & % of shares / voting rights held by him with PAC Promoter / Person having control over a company Within 21 Days from the financial year ending March 31 st Within 21 Days from the financial year ending March 31 & Record Date for the purpose of Dividend. COMPANY His shareholding in that company As on 31 st March Every Person (including those mentioned u/r 6) who holds more than 15% of shares or voting rights in the company Time Period To whom Particulars of disclosure By whom
41.
42.
43. Reg 7(1 & 1A) ACQUISTION OF 5% & MORE SHARES OF CO. Target Company & the Stock Exchanges, where its shares are listed Sale/ Purchase aggregating 2% or more of the share capital of the target Company Acquirer as in Regulation 11(1) (15%- 55%) Within 2 days of every stage of acquisition Within 2 days of Such sale/purchase. Target Company & the Stock exchanges where shares of the target Company are listed. Aggregate of his shareholding or voting rights in that Company Acquirer whose acquisition entitles him to exercise more than 5%, 10%, 14% (54% or 74%) of shares or voting rights Time Period To whom Particulars of disclosure By whom
44. Reg 7(2A & 3) ACQUISTION OF 5% & MORE SHARES OF CO. Stock Exchanges , where its shares are listed Aggregate number of shares. Target Company whose shares are acquired u/r 7(1) & 7(1A) Immediately Within 7 days of Receipt of information u/r 7(1) & 7(1A) On its Notice Board & Website (Company must ensure the same) Information received from the Acquirer Stock Exchanges Time Period To whom Particulars of disclosure By whom
45. JUDGEMENTS OF SAT JUDGEMENTS OF SAT MATTER OF DEBATE WHETHER COMPLIANCE OF REGULATION 7(1) IS ONE TIME COMPLIANCE? HELD RELIANCE INDUSTRIES VS SEBI IT WAS HELD THAT IT IS NOT ONE TIME. COMPLIANCE HAS TO BE DONE AS PER THE VARIATIONS OCCURRED. REGULATION 7
46. QUERIES ON TAKEOVER CODE REGULATION 7(1A) 1. Where a company is in a process of merging with another company and in process, there is change in the control and in shareholding pattern of the Company. Would it have to comply with regulation 7(1A) of the SEBI takeover code. 2. Does a person who has got the exemption from the Takeover Panel constituted under regulation 4 have to comply with regulation 7(1A)? 3. Whether non- disclosure of information as required under regulation 7(1A) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, a continuing offence or one time offence?
47. POWER TO CALL FOR INFORMATION… Reg 9 SEBI CO & STOCK EXCHANGE To Furnish information Of Disclosures w.r.t Regulation 6, 7 & 8
52. Reg 11(2A) PROVISO INSERTED ON 30.12.04 where the target company had obtained listing of its shares by making offer u/r 19(2)(b) of Securities Contracts (Regulation) Rules, 1957 … Acquirer (55%-75% 90%) Make Public Announce-ment 55%-75%90% + 1 Share or VR X X Substitute 90% in place of 75%
53. QUERIES ON TAKEOVER CODE REGULATION 11 Regulation 11(1) allows a person holding (15% -75 %) of shares of a company, to further acquire upto 5% of the shares of that Company in a particular year. If in a particular year a person acquires 5% according to the above regulations and further plan to acquire certain shares inter se (which are exempted from the regulation of 10,11,12). Is it valid according to the regulations? Where a person makes Public Announcement pursuant to regulation 11(1), is he further required to give disclosures pursuant to regulation 7(1A) of SEBI (Substantial Acquisition of Shares and Takeover) Regulations 1997?
55. Reg 3(1)(a) Exemptions… Regulation 3(3) Regulation 3(4) DISCLOSURE REQUIRED TO AVAIL EXEMPTIONS: ALLOTMENT IN PURSUANCE OF AN APPLICATION MADE TO A PUBLIC ISSUE. Except Firm Allotment – exempt only if full disclosure is made in the prospectus. Acquirer Stock Exchange 4 Days in advance of Acquisition Information Acquirer SEBI Within 21 days of Acquisition + Fees of Rs. 25000/- Report
56.
57. Reg 3(1)(d) Exemptions ALLOTMENT TO THE UNDERWRITERS PURSUANT TO ANY UNDERWRITING AGREEMENT.
58.
59. Reg 3(1)(ff) Exemption Contd. Acquisition of shares by way of Transmission ON Succession OR Inheritance. Acquisition of shares by a Person in exchange of shares received under a Public offer made under these guidelines
60. JUDGEMENTS OF SAT JUDGEMENTS OF SAT MATTER OF DEBATE WHETHER TRANSFER AMONG PROMOTERS BE TREATED AS SUCCESSION, WHEN THERE IS NO CHANGE IN THE CONTROL? HELD J.M. FINANCIAL& INVESTMENT CONSULTANTS VS SEBI IT WAS HELD THAT EVEN IF THERE IS NO CHANGE IN THE CONTOL BUT IT WILL BE TREATED AS INTER-SE TRANSFER BECAUSE IN THIS CASE THE TRANSFER WAS DONE WITH CONSIDERATION. EXEMPTIONS
61. Acquisition of shares by Government Companies within the meaning of Section 617 of Companies Act. Except acquisition through Competitive Bidding Process of Listed PSU Shares in Disinvestment. Disclosure is required only if the acquisition exceeds 5% of voting shares capital of the company. DISCLOSURE REQUIRED TO AVAIL EXEMPTIONS: Reg 3(1)(h) Exemption Contd. Regulation 3(3) Acquirer Stock Exchange 4 Days in advance of Acquisition Information
62. Reg 3(1)(i) Transfer of shares from State Level Financial Institution including their subsidiaries to Co-Promoters, Acquirer pursuant to an agreement. Exemption Contd. Regulation 3(3) Regulation 3(4) Acquirer Stock Exchange 4 Days in advance of Acquisition Information Acquirer SEBI Within 21 days of Acquisition + Fees of Rs. 25000/- Report
63. Transfer of shares from Venture Capital Funds or Foreign Venture Capital Investors to the Promoters of the Venture Capital Undertaking . Reg 3(1)(ia) Exemption Contd…
64. Acquisition under Scheme of Arrangement Section 18 of SICA Reconstruction Including Amalgamation, Merger or De-merger under any law. Reg 3(1)(j) Exemption Contd…
65. Acquisition by Secured creditor Of Borrower Target company Or Restoration Of management Under SARFESI Act, 2002 Reg 3(1)(ja) Exemption Contd…
66. Acquisition of shares in unlisted companies Exemption NOT available if by virtue of such acquisition, the acquirer acquires Shares OR Voting Rights OR Control over a listed company . Reg 3(1)(k) Exemption Contd. Indirect Acquisition of a listed company
67. Acquisition of shares in terms of guidelines or regulations regarding Delisting of Securities specified or framed by the Board (ff) Acquisition of shares by a Person in exchange of shares received under a Public offer made under these guidelines . * W.e.f 30.12.2004 Reg 3(1)(ka)* Exemption Contd.
68. Group Relatives Promoters & Foreign Collaborators Acquirer & PAC Exemption not available if transfer is at a price > 25% of the price determined in terms of Reg 20(4) & 20(5) Reg 3(1)(e) Inter se Transfers amongst PROVIDED THAT REG 6, 7 & 8 HAVE BEEN COMPLIED. 3 yrs holding of shares by Transferee & transferor
69. Reg 3(1)(e) Inter se Transfers Contd… DISCLOSURE REQUIRED TO AVAIL THIS EXEMPTION: Regulation 3(3) Regulation 3(4) Acquirer Stock Exchange 4 Days in advance of Acquisition Information Acquirer SEBI Within 21 days of Acquisition + Fees of Rs. 25000/- Report
70. 1. Where A & B, promoters of a company, are the joint shareholders, A being the first joint holder, holds voting rights and the benefits attached to those shares. In case B wants to transfer his joint share holding to A. Would it be treated as transfer inter se for the purpose of takeover code? 2. And if they are simple shareholders instead of promoters and one of them wants to transfer shares to other, in that case will it amount to acquisition so as to attract takeover code? QUERIES ON TAKEOVER CODE Inter se Transfers
71. QUERIES ON TAKEOVER CODE Inter se Transfers 1. In case of a company going for merger and the transferor company’s shareholders become the promoter, Can they go for the inter se transfer of shares, so as to avail exemption under Regulation 3? 2. Two promoters A & B of the company hold 20% shares each in a company. A acquires 5% every year so as his acquisition becomes 51% in a particular year. Now A wants to remove B from the Board in the coming AGM. Whether A can exercise such power?
72. JUDGEMENTS OF SAT MATTER OF DEBATE HELD Regulation 3(4) is applicable to all cases wherever the acquisition exceeds the limit prescribed in the regulations irrespective of the existing holding of the acquirer. NAAGRAJ GANESHMAL JAIN VS P.SRI SAI RAM, THE SAT Regulation 3(4) Whether Reporting under Regulation 3(4) is one time reporting?
73. JUDGEMENTS OF SAT MATTER OF DEBATE HELD It was held that when the belated filing of the report under 3(4) does not resulted in any gain to the appellant & also no loss to the invested, the imposition of the penalty is not justified. SAMRAT HOLDINGS VS SEBI Regulation 3 Whether the belated filing of report should not be considered as commission of offence when there is no substantial loss to the investors?
74. QUERIES ON TAKEOVER CODE REGULATION 3 A company brings out preferential issue as per SEBI guidelines, and promoters acquire 12% of the preferential issue. But their post equity shareholding % is same as pre issue shareholding. Can they further acquire 5 % through creeping route in that year, without violating takeover code?
75. 2. In case of takeover of a loss making company, whose net worth is negative and business is closed, can the offer price for the shares be as minimum as, 10 paisa /share? 1. In complying with the provisions of 11 of the Regulation, the promoters acquired more than 15% of shareholding and gave a public offer of 20%, while in due process the some other persons secretively acquired 24% assuming that compliance has been made by the promoters. What shall be the consequences and the violation on such acquisition? QUERIES ON TAKEOVER CODE GENERAL
76. TAKEOVER CODE’S MAIN OBJECTIVE IS TO ENSURE EQUALITY OF TREATMENT & OPPORTUNITY TO ALL SHAREHOLDERS & AFFORD PROTECTION TO THEM IN THE EVEN OF SUBSTANTIAL ACQUISITION OF SHARES & TAKEOVERS Punjab State Industrial Development Corporation Ltd Vs. SEBI Last but not the least…