The document discusses key aspects of India's Takeover Code such as definitions of acquirer, control, promoter, target company, shares, and substantial acquisition. It provides details on disclosure requirements for substantial shareholding and control. It also discusses SAT judgements related to concepts like acquirer, PAC, promoter, shares. The document compares promoter definitions before and after 2004 amendments and raises queries on forfeiture of shares and treatment of partly paid shares.
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.
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.
This presentation clarifies the provisions of SEBI Takeover Code including exemptions and creeping acquisition provisions. In addition to this, it gives an anlaysis of recent amendment in regulations and judicial pronouncements made under these regulations.
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.
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...
Regulation CF provides an exemption from the registration requirements of the Securities Act for certain crowdfunding transactions. To qualify for this exemption, the transactions must meet specific requirements, including limits on the dollar amount of the securities that may be sold by an issuer and the dollar amount that may be invested by an individual in a 12-month period. It also must be conducted through a registered intermediary that complies with specified requirements. These intermediaries are called “funding portals.” Title III also provides limitations on who may rely on the exemption and establishes specific liability provisions for material misstatements or omissions in connection with Section 4(a)(6)-exempt transactions.
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.
This presentation clarifies the provisions of SEBI Takeover Code including exemptions and creeping acquisition provisions. In addition to this, it gives an anlaysis of recent amendment in regulations and judicial pronouncements made under these regulations.
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.
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...
Regulation CF provides an exemption from the registration requirements of the Securities Act for certain crowdfunding transactions. To qualify for this exemption, the transactions must meet specific requirements, including limits on the dollar amount of the securities that may be sold by an issuer and the dollar amount that may be invested by an individual in a 12-month period. It also must be conducted through a registered intermediary that complies with specified requirements. These intermediaries are called “funding portals.” Title III also provides limitations on who may rely on the exemption and establishes specific liability provisions for material misstatements or omissions in connection with Section 4(a)(6)-exempt transactions.
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.
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.
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...
The Amended Rules of Significant Beneficial ownership, 2019
Effective date : 08th February, 2019
MCA's step towards transparency of shareholding structures and help the government identify benami transactions and prevent money laundering activities.
#Sigificantbeneficialownershipamendedrules
This presentation explains in detail and a lucid manner, all the provisions of SEBI Takeover code. Also, it deals with certain debatable issues under the code.
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.
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
All about CS Profession: Excellence Independence Professional Ethics Quality Pavan Kumar Vijay
All about Company Secretaries (CS) Profession by Pavan Kumar Vijay (pkvijay), past President of ICSI: A catalyst in Corporate Growth, an extended arm of Government/ regulators, the conscience seeker,
Points Discussed:
Why IT?
e-governance
Challenges for CS,
e - transformation
Opportunities for CS
Digital Signature Certificates,
Encryption & Decryption
WHY IT IS IT ESSENTIAL FOR CS WHAT IT CAN DO FOR US
IT Facilitate -GLOBALIZATION, Telecommunications, Advancement, Transportation Facilities, Information Technology & Knowledge Sharing,
Transparency & Good Governance
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
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Improving profitability for small businessBen Wann
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Discover the innovative and creative projects that highlight my journey throu...dylandmeas
Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
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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.
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
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.
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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.
3. Change in definition of promoter Promoter defined differently for Inter se transfers Meaning of Public Shareholding Revised Code put in line with delisting guidelines Indirect Preferential allotment allowed upto 55% The range for creeping acquisition slashed 75% - 55% Exemptions U/r 3 made subject to delisting gdlines Penalty provisions U/r 45 widened Major changes
4. What is meant by Takeovers & Substantial Acquisition ?
5. 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.
7. ANY PERSON INDIRECTLY DIRECTLY ACQUIRES WHO OR OR AGREES TO ACQUIRE SHARES VOTING RIGHTS CONTROL OR OR WITH PAC HIMSELF OR IN TARGET COMPANY EITHER Reg 2 (b) ACQUIRER
8. JUDGEMENTS OF SAT MATTER OF DEBATE WHETHER A PERSON WHO AGREES TO ACQUIRE SHARES WILL BE TERMED AS “ ACQUIRER”? HELD IT WAS HELD THAT THE MOMENT THE ACQUIRER SETS INTO MOTION THE PROCESS OF ACQUIRING SHARES OR CONTROL, ACQUISITON WITHIN THE MEANING OF THE REGULATION TAKES PLACE. B.P Amoco PLC VS SEBI
9. 1.In context of takeover code, when are the shares said to be acquired – · Whether on instruction for purchase order; or · On payment of consideration; or · On receipt of shares; or · On registration of shares in the name of acquirer. QUERIES ON TAKEOVER CODE ACQUIRER
11. Reg 2 (c) CONTROL Right to Appoint Majority of Directors Control of Management Control of Policy Decisions EXERCISABLE INDIVIDUALLY + PAC OR DIRECTLY INDIRECTLY OR BY VIRTUE OF Shareholding MGT Right S/H Agmt Voting Agmt INCLUDES CONTROL
12. Reg 12 ACQUISITON OF CONTROL IRRESPECTIVE OF ACQUISITON OF SHARES OR VOTING RIGHTS NO ACQUIRER SHALL ACQUIRE CONTROL WITHOUT PUBLIC ANNOUNCEMENT EXEMPTION FROM THE ABOVE: NOTHING ABOVE WILL APPLY TO ANY CHANGE IN CONTROL IF IT HAS TAKEN PLACE IN PURSUANCE TO A SPECIAL RESOLUTION SPECIAL RESOLUTION SHOULD BE PASSED BY POSTAL BALLOT ONLY
15. Reg 2 (e) PERSONS SUBSTANTIAL ACQUISITION OF SHARES OR VOTING RIGHTS GAINING CONTROL OVER THE TARGET COMPANY PURSUANT TO AN COMMON OBJECTIVE PURPOSE OF OR AGREEMENT UNDERSTANDING OR By Acquiring By Agreeing to Acquire who for a Person Acting In Concert OR DIRECTLY INDIRECTLY OR FORMALLY INFORMALLY OR CO-OPERATE OR
16. Reg 2 (e) Contd. Deemed Person Acting In Concert A Co, 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 Co’s mentioned in A A Mutual Fund with Sponsor / Trustee / AMC FII’s with sub-accounts Merchant Bankers with their Clients Portfolio Managers with their Cleints
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
18. 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
19. JUDGEMENTS OF SAT PAC MATTER OF DEBATE WHETHER A PROMOTER CAN PARTICIPATE IN THE PUBLIC OFFER BY THE ACQUIRER. HELD IT WAS HELD THAT YES, A PROMOTER NOT INVOLVED IN ACQUISITON & SELLING HIS STAKE IN THE PUBLIC OFFER, CANNOT BE TREATED AS PAC & HENCE CANNOT BE BARRED. MODI SPG & WVG MILLS CO LTD VS SEBI
21. A LISTED COMPANY INDIRECTLY DIRECTLY ACQUIRED WHOSE OR IS BEING ACQUIRED SHARES VOTING RIGHTS CONTROL OR OR Reg 2 (o) Target Company IS BY THE ACQUIRER OR
23. Any person who Directly OR Indirectly is in control of the company Reg 2 (h) Who is named as Promoter in any Offer Document OR Shareholding Disclosure Whichever is later Any person named as PAC with Promoter in any disclosure Document W.e.f 30.12.2004 Promoter
24. Where person is an individual His Spouse, parents, Brothers, Sisters or Children Any Co in which ≥ 26% is held by him or with A A B Any FIRM or HUF in which He or A is partner or member C Any CO. in which B holds > 50% Shares D Any FIRM in which HE with A holds > 50% Shares E Reg 2 (h) Contd. Promoter
25. Where person is a Body Corporate X Its Holding & Subsidiary Co. Any Co in which X holds ≥ 26% shares A B Any Co which holds X’s ≥ 26% shares C Y Co. in which Common PAC holding ≥ 26% in both Y & X D A Co. under Same Mgmt U/s 370 (1B) of Co. Act E Reg 2 (h) Contd. Promoter
26. JUDGEMENTS OF SAT JUDGEMENTS OF SAT MATTER OF DEBATE WHETHER A PROMOTER IS AN ‘ACQUIRER’? HELD NAAGRAJ GANESHMAL JAIN VS SEBI IT WAS HELD THAT EVEN IF PROMOTER IS ALREADY HAVING CONTROL IF ACQUIRER FURTHER SHARES, HE WILL TREATED AS ACQUIRER. PROMOTER
27. Promoter Comparative Study Definition Before 30.12.2004 Definition After 30.12.2004 1. Person in control directly or indirectly No Change 2. Person or Persons named as promoter in any offer document of offer of securities to the public or existing shareholder. Who is named as Promoter in any Offer Document OR Shareholding Disclosure Whichever is later
28. Comparative Study Contd. Promoter Definition Before 30.12.2004 Definition After 30.12.2004 When person is individual His relatives as Defn u/s 6 of Co. Act 1956. His Spouse, parents, Brothers, Sisters or Children Any company controlled by P/R Any Co. 26% stake hold by promoter + relative Firm or HUF in which P/R is partner or coparcener ; stake not < 50% No Change
29. Comparative Study Contd. Promoter Definition Before 30.12.2004 Definition After 30.12.2004 When person is body corporate Holding & Subsi No Change Any company controlled by P/R Any Co. 26% stake hold by promoter + relative Firm or HUF in which P/R is partner or coparcener ; stake not < 50% No Change
31. Shares Reg 2 (k) Shares carrying voting rights Security which would entitle to receive shares with voting rights BUT Shall Not Include Preference Shares
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?
37. OBJECTIVE 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 By whom Particulars of disclosure To whom Time Period Any Person holding more than 5% of shares or voting rights in the company His aggregate shareholding in that company COMPANY Within 2 months i.e. (by 20.04.97) of notification of these Regulations (20.02.97) Promoter / Person having control over a company No. & % of shares / voting rights held by him with PAC COMPANY
39. Reg 6 ( 2 & 4 ) TRANSITIONAL PROVISION Initial Disclosures by Company By whom Particulars of disclosure To whom Time Period Company in which any person holds more than 5% of its shares/ voting rights Aggregate number of shares held by each such person All Stock Exchanges, where its shares are listed Within 3 months i.e. (by 20. 05 .97) of notification of these Regulations (20.02.97) Company whose shares are listed on a stock exchange Names, add, No & % of shares or voting rights of promoters and persons having control All Stock Exchanges, where its shares are listed
40. Reg 8(1& 2) Yearly Disclosures by Persons CONTINUAL DISCLOSURES By whom Particulars of disclosure To whom Time Period Every Person (including those mentioned u/r 6) who holds more than 15% of shares or voting rights in the company His shareholding in that company As on 31 st March 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. Promoter / Person having control over a company No. & % of shares / voting rights held by him with PAC COMPANY
41.
42.
43. Reg 7(1 & 1A) ACQUISTION OF 5% & MORE SHARES OF CO. By whom Particulars of disclosure To whom Time Period Acquirer whose acquisition entitles him to exercise more than 5%, 10%, 14% (54% or 74%) of shares or voting rights Aggregate of his shareholding or voting rights in that Company Target Company & the Stock exchanges where shares of the target Company are listed. Within 2 days of every stage of acquisition Within 2 days of Such sale/purchase. Acquirer as in Regulation 11(1A) (15%- 55%) Sale/ Purchase aggregating 2% or more of the share capital of the target Company Target Company &the Stock Exchanges, where its shares are listed
44. Reg 7(2A & 3) ACQUISTION OF 5% & MORE SHARES OF CO. By whom Particulars of disclosure To whom Time Period Stock Exchanges Information received from the Acquirer On its Notice Board & Website (Company must ensure the same) Immediately Within 7 days of Receipt of information u/r 7(1) & 7(1A) Target Company whose shares are acquired u/r 7(1) & 7(1A) Aggregate number of shares. Stock Exchanges , where its shares are listed
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
53. Reg 11(2A) PROVISO INSERTED ON 30.12.04 UNLESS OTHERWISE PROVIDED IN REGULATIONS IF THE PROPOSED ACQUISITON REDUCES THE LIMIT REQUIRED TO BE MAINTAINED FOR LISTING OF SECURITIES THEN THE ACQUISITION SHALL BE IN ACCORDANCE WITH SEBI (DELISTING OF SECURITIES) GUIDELINES, 2003 EXEMPTION : THE ABOVE-MENTIONED WILL NOT BE APPLICABLE TO ACQUISITION BY VIRTUE OF GLOBAL ARRANGEMENT
54. 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?
56. Reg 3(1)(a) 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. DISCLOSURE REQUIRED TO AVAIL EXEMPTIONS: ACQUIRER STOCK EXCHANGE {Report as in prescribed format within 21 days of date of acquisition} Disclosure is required only if the acquisition exceeds 15% of voting shares capital of the company. Fees of Rs 10,000/- shall be accompanied along with the report.
57.
58. Reg 3(1)(d) Exemptions ALLOTMENT TO THE UNDERWRITERS PURSUANT TO ANY UNDERWRITING AGREEMENT.
59.
60. Acquisition of shares by a Person in exchange of shares received under a Public offer made under these guidelines Reg 3(1)(ff) Exemption Contd.
61. Acquisition of shares by way of Transmission ON Succession OR Inheritance. Reg 3(1)(g) Exemption Contd.
62. 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
63. 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. {Details of proposed acquisition 4 Working Days in advance Reg 3(3)} Disclosure is required only if the acquisition exceeds 5% of voting shares capital of the company. ACQUIRER STOCK EXCHANGE DISCLOSURE REQUIRED TO AVAIL EXEMPTIONS: Reg 3(1)(h) Exemption Contd.
64. Reg 3(1)(i) Transfer of shares from State Level Financial Institution including their subsidiaries to Co-Promoters, Acquirer pursuant to an agreement. ACQUIRER STOCK EXCHANGE {Details of proposed acquisition 4 Working Days in advance } Disclosure is required only if the acquisition exceeds 5% of voting shares capital of the company. ACQUIRER STOCK EXCHANGE {Report as in prescribed format within 21 days of date of acquisition Reg 3(4)} Disclosure is required only if the acquisition exceeds 15% of voting shares capital of the company. Fees of Rs 10,000/- be enclosed along with the report.Reg3(5) Exemption Contd.
65. 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.
66. Acquisition under Scheme or Arrangement Section 18 of SICA Reconstruction Including Amalgamation, Merger or De-merger under any law. Reg 3(1)(j) Exemption Contd.
67. Acquisition of shares in companies whose shares are not listed on any stock exchange. 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.
68. Acquisition of shares in terms of guidelines or regulations regarding Delisting of Securities specified or framed by the 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.
69. 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
70. Reg 3(1)(e) Inter se Transfers Contd. DISCLOSURE REQUIRED TO AVAIL THIS EXEMPTION: ACQUIRER STOCK EXCHANGE {Details of proposed acquisition 4 days in advance Reg 3(3)} Disclosure is required only if the acquisition exceeds 5% of voting shares capital of the company. ACQUIRER STOCK EXCHANGE {Report as in prescribed format within 21 days of date of acquisition Reg 3(4)} Disclosure is required only if the acquisition exceeds 15% of voting shares capital of the company. Fees of Rs 10,000/- shall be accompanied along with the report. Reg 3(5)
71. 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
72. 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?
73. 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?
74. 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?
75. 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?
76. 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
77. 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…