The document summarizes a paper reviewing the evolution of India's takeover code and key recommendations of the TRAC committee report. It discusses how the code began with Clause 40 of the listing agreement and was later formalized through SEBI regulations. The TRAC report suggested increasing the initial open offer trigger from 15% to 25% shares, requiring open offers for all shares, and strengthening disclosure requirements. It also analyzed judicial precedents and concluded the code aims to ensure fairness while balancing stakeholder interests but full harmonization of regulations is still needed.
The document provides an overview of the SEBI Takeover Regulations, 2011. It discusses the need for takeover regulations in India due to changes in the capital market scenario. The key highlights of the regulations include thresholds for open offers, exemption limits for disclosure requirements, and obligations of acquirers and merchant bankers. Key definitions under the regulations relate to acquirer, acquisition, control, frequently traded shares, and enterprise value calculation.
The document discusses various aspects of SEBI Takeover Code regulations including key definitions, compliance requirements, disclosure obligations, thresholds, exemptions and pricing provisions. Some key highlights include:
- Definitions of acquirer, shares, person acting in concert and what constitutes control.
- Disclosure obligations for acquisitions above certain thresholds (5%, 15% etc.) and timelines to comply.
- Exemptions available for inter-se transfers between qualifying persons subject to certain conditions.
- Determination of open offer price based on highest negotiated price or volume weighted average price for frequently/infrequently traded shares.
- Issues around interpretation of creeping acquisition limits and applicability of regulations.
This document outlines the contents of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011, which provides the legal framework for takeover bids and acquisitions of Indian public companies. It discusses the objectives of the regulations, key definitions, triggers for mandatory open offers, offer size and pricing requirements, escrow accounts, the open offer process, obligations of acquirers and target companies, exemptions, and penalties for non-compliance. The regulations aim to protect investors and ensure fair acquisition processes along with timely disclosure of information.
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.
The new Takeover Code of 2011 introduced several changes from the previous 1997 code:
1. The threshold for triggering an open offer was increased from 15% to 26% shareholding in the target company.
2. The minimum size of the open offer was increased from 20% to 25% of the total shares of the target company.
3. Non-compete fees paid to promoters of the target company are no longer permitted.
The new code aims to provide greater protection to minority shareholders and ensure fair share acquisition during takeovers.
The document summarizes the key proposed changes to SEBI's takeover regulations and perspectives from industry. Some major changes include increasing the threshold for a mandatory open offer from 15% to 25%, requiring any change in control to be through an open offer, increasing the minimum offer size from 20% to 100%, and reducing the timeline for completing an open offer. While some changes like a higher threshold align with global norms, industry has concerns around issues like cost increases and fewer open offer opportunities due to the changes.
1. The document discusses various regulations under the SEBI Takeover Code regarding disclosure requirements and compliance obligations when acquiring shares or voting rights in an Indian listed company beyond certain thresholds.
2. It compares key terms and explains regulations around continual disclosures, event-based disclosures, and the requirement to make a public announcement when acquiring shares or voting rights beyond certain levels.
3. It addresses issues around claiming exemptions under the Takeover Code regulations, applicability of regulations to indirect acquisitions such as those through a scheme of arrangement, and factors to consider for investment decisions that may invoke the Takeover Code.
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.
The document provides an overview of the SEBI Takeover Regulations, 2011. It discusses the need for takeover regulations in India due to changes in the capital market scenario. The key highlights of the regulations include thresholds for open offers, exemption limits for disclosure requirements, and obligations of acquirers and merchant bankers. Key definitions under the regulations relate to acquirer, acquisition, control, frequently traded shares, and enterprise value calculation.
The document discusses various aspects of SEBI Takeover Code regulations including key definitions, compliance requirements, disclosure obligations, thresholds, exemptions and pricing provisions. Some key highlights include:
- Definitions of acquirer, shares, person acting in concert and what constitutes control.
- Disclosure obligations for acquisitions above certain thresholds (5%, 15% etc.) and timelines to comply.
- Exemptions available for inter-se transfers between qualifying persons subject to certain conditions.
- Determination of open offer price based on highest negotiated price or volume weighted average price for frequently/infrequently traded shares.
- Issues around interpretation of creeping acquisition limits and applicability of regulations.
This document outlines the contents of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011, which provides the legal framework for takeover bids and acquisitions of Indian public companies. It discusses the objectives of the regulations, key definitions, triggers for mandatory open offers, offer size and pricing requirements, escrow accounts, the open offer process, obligations of acquirers and target companies, exemptions, and penalties for non-compliance. The regulations aim to protect investors and ensure fair acquisition processes along with timely disclosure of information.
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.
The new Takeover Code of 2011 introduced several changes from the previous 1997 code:
1. The threshold for triggering an open offer was increased from 15% to 26% shareholding in the target company.
2. The minimum size of the open offer was increased from 20% to 25% of the total shares of the target company.
3. Non-compete fees paid to promoters of the target company are no longer permitted.
The new code aims to provide greater protection to minority shareholders and ensure fair share acquisition during takeovers.
The document summarizes the key proposed changes to SEBI's takeover regulations and perspectives from industry. Some major changes include increasing the threshold for a mandatory open offer from 15% to 25%, requiring any change in control to be through an open offer, increasing the minimum offer size from 20% to 100%, and reducing the timeline for completing an open offer. While some changes like a higher threshold align with global norms, industry has concerns around issues like cost increases and fewer open offer opportunities due to the changes.
1. The document discusses various regulations under the SEBI Takeover Code regarding disclosure requirements and compliance obligations when acquiring shares or voting rights in an Indian listed company beyond certain thresholds.
2. It compares key terms and explains regulations around continual disclosures, event-based disclosures, and the requirement to make a public announcement when acquiring shares or voting rights beyond certain levels.
3. It addresses issues around claiming exemptions under the Takeover Code regulations, applicability of regulations to indirect acquisitions such as those through a scheme of arrangement, and factors to consider for investment decisions that may invoke the Takeover Code.
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.
This document provides an overview of SEBI Takeover Regulations, 2011 and SEBI Insider Trading Regulations, 1992. It discusses the need for SEBI takeover regulations due to changes in the Indian capital market landscape. Key definitions covered include acquirer, acquisition, control, shares, person acting in concert, enterprise value, and volume weighted average market price. The document outlines the chapter structure of SEBI Takeover Regulations, 2011 regarding substantial acquisition of shares, open offer process, other obligations, disclosure requirements, and miscellaneous provisions.
The document provides an overview of the new SEBI Takeover Regulations of 2011. Some key changes introduced include increasing the initial threshold limit for triggering an open offer from 15% to 25% and widening the scope of creeping acquisition from 15-55% to 25-75%. New definitions like acquisition, enterprise value, and frequently traded shares were also introduced. The minimum offer size was increased from 20% to 26% and the offer price calculation criteria were modified.
The document discusses various exemptions provided under the SEBI Takeover Code regulations. It explains key terms related to takeovers and the provisions of Regulations 10, 11, and 12 from which exemptions can be provided under Regulation 3. It then explores the various categories of exemptions provided under Regulations 3(1) including inter-se transfers, acquisitions in ordinary course of business, and transfers pursuant to schemes of arrangement. It also discusses conditions for availing exemptions and matters of debate addressed by SEBI in relation to certain cases.
The document summarizes key aspects of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 regarding takeover of listed companies in India. It defines important terms like acquirer, acquisition, control and outlines the regulations around substantial acquisition of shares or voting rights that trigger an open offer like acquiring over 25% under Regulation 3(1) or creeping acquisition of up to 5% annually under Regulation 3(2). It also describes the process and compliance requirements for open offers including appointment of a merchant banker, contents of public announcement, escrow account, competing offers, exemptions and general obligations of acquirers.
substantial acquisition of shares and take overs (India)92_neil
The document provides an overview of substantial acquisitions of shares and takeovers in India, including definitions of key terms, the evolution and objectives of takeover regulations, types of takeovers and triggers for open offers. It discusses topics such as acquirers, target companies, control, promoters and promoter groups. The presentation also outlines the process, pricing and obligations in public announcements and open offers.
Disclosure requirements in a listed company for us for Acquisition or Disposa...Amit Kumar
The document outlines the disclosure requirements for individuals and entities holding shares or voting rights in listed companies in India according to the SEBI Prohibition of Insider Trading Regulations 1992 and SEBI Substantial Acquisition of Shares and Takeovers Regulations 2011. It details various initial, continual and event-based disclosure requirements for individuals or entities acquiring or holding over 5% shares or crossing other shareholding thresholds. It also specifies the disclosure timelines, formats and applicable penalties for non-compliance.
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.
The document discusses the exemptions available under Regulation 10 of SEBI (SAST) Regulations, 2011 for inter se transfer of shares. It provides five categories of inter se transfers that are exempt from open offer requirements: 1) between immediate relatives, 2) between promoters for over 3 years, 3) between qualifying parties such as subsidiaries of the same holding company, 4) between persons acting in concert for over 3 years, and 5) between shareholders acting in concert for over 3 years and companies wholly owned by them. It outlines various conditions for availing these exemptions including pricing and disclosure requirements.
Acquisition of Shares & Takeover SEBI REGUL manjunath
The document outlines regulations from the SEBI Regulation Act of 1997 regarding substantial acquisitions of shares and takeovers. It establishes rules for disclosing shareholding over 5% within 2 months, requirements for public announcements and offers when acquiring over 10% of shares, pricing guidelines for offers, escrow account funding, and restrictions on acquiring shares of financially weak companies. The act aims to promote transparency and shareholder rights in business takeovers.
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.
The document summarizes key aspects of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 or the SEBI Takeover Code. It outlines the objectives of protecting shareholder interests and ensuring adequate disclosure in M&A transactions. It defines important terms like acquirer, control and persons acting in concert. It also describes provisions around periodic disclosures, open offer triggers, exemptions and timelines that must be followed for open offers.
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.
Revamping of SEBI Regulations- Delisting, Takeover and Insider TradingPavan Kumar Vijay
The document discusses proposed changes to SEBI's delisting regulations. Some key changes include determining the final exit price based on the highest price at which the promoter can reach the 90% threshold, instead of the price where most shares are tendered. Timelines for the delisting process would be shortened. Small companies with capital up to Rs. 10 crore and net worth up to Rs. 25 crore would now be eligible for direct delisting. Restrictions on promoter group share sales prior to delisting are also introduced.
The document outlines SEBI's revised takeover code for substantial acquisitions and takeovers of shares in Indian companies. Some key points include:
1. Any person acquiring over 5% of shares or voting rights of a listed company must disclose this to stock exchanges within 4 days.
2. Those holding over 10% of shares must disclose their holdings annually.
3. Acquirers of over 10-25% of shares must make a public announcement before acquiring more than 2% additional voting rights.
4. The minimum offer price in a takeover bid must be the highest of the negotiated price or average weekly stock price of the target company.
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.
The document discusses key concepts related to mergers, acquisitions, and takeovers such as:
- A merger integrates two firms on an equal basis, an acquisition involves one firm buying another to make it a subsidiary, and a takeover occurs when a target firm is acquired without soliciting a bid.
- Reasons for M&A include developing new capabilities, avoiding competition, and lower risk than internal development. Problems include integration difficulties, debt loads, inability to achieve synergies, and managers overly focused on acquisitions.
- Takeover regulations ensure minority shareholders are treated fairly during substantial acquisitions and are given an exit opportunity. The regulations mandate open offers and establish thresholds for mandatory offers.
Takeover Panorama, a Monthly Newsletter by Corporate Professionals on Takeove...Corporate Professionals
-The brief synopsis of recent Judicial Pronouncements given by the SEBI, AO, SAT, Informal Guidance and Consent orders passed in the month of December in the matter of SEBI Takeover Regulations.
-The brief synopsis of latest Open Offers given by the National as well as International Acquirers under the SEBI Takeover Regulations
-Unhide the hidden but important provision of the SEBI Takeover Regulations which generally get unnoticed on a plain reading of the regulations.
Acquisition of stake in YourNest Angel Fund by Religare Global Asset Management
Acquisition of stake in Bokaro Jaypee Cement by Dalmia Bharat
Telstra Health Acquires Business of IdeaObject
The document summarizes key aspects of amalgamation, mergers, acquisitions, and takeovers under Indian law. It outlines the procedures for amalgamation/mergers according to the Companies Act, including drafting schemes of arrangement, holding shareholder meetings, applying to courts for approval, and filing with the registrar of companies. It also describes major laws governing acquisitions and takeovers, such as SEBI regulations on substantial acquisitions and takeovers. The procedures under SEBI regulations include public announcements, letters of offer to shareholders, minimum share acquisition levels, and escrow account requirements.
This document defines mergers and amalgamations under Indian company law. It explains that a merger involves one company absorbing another, while amalgamation creates a new company from two or more existing companies. It outlines the process for calling meetings of creditors/members to approve schemes, requirements for notice and documents to be circulated. The effect and sanctions of approved schemes by the tribunal are described, including provisions for transfers of assets/shares and dissolution of companies. Penalties for non-compliance with the process are also mentioned. The section also discusses cross-border mergers between Indian and foreign companies.
M&A under New Companies Act, 2013- 04.10.14 FinalHarshul Shah
The document discusses key changes to mergers and acquisitions (M&A) under the new Indian Companies Act compared to the old act. Some high-level points include: approval of M&A schemes now requires board meeting approval; additional documents like a valuation report must be attached with notices; authorities have 30 days to provide representations on proposed deals; thresholds for shareholder objections were introduced; fees paid by transferor companies can now be set off against transferee companies. The process for schemes involving compromises/arrangements and amalgamations is now separated between sections 230 and 232 respectively.
The document discusses key concepts related to mergers, acquisitions, and takeovers such as:
- A merger integrates two firms on an equal basis, an acquisition involves one firm buying another to make it a subsidiary, and a takeover occurs when a target firm is acquired without soliciting a bid.
- Reasons for M&A include developing new capabilities, avoiding competition, and lower risk than internal development. Problems include integration difficulties, inadequate target evaluation, and inability to achieve synergies.
- Trigger points for a mandatory open offer under Indian takeover regulations include acquiring 25% or more voting rights (initial threshold) or control over a target company. Creeping acquisition is permitted between 25-75
The document summarizes the evolution of SEBI's Takeover Code regulations in India from 1994 to 2011. It provides key definitions related to acquisitions and control under the regulations. The purpose of the Takeover Code is to ensure fair exit opportunities for shareholders and fair disclosure regarding changes in shareholding and control of companies. The regulations govern direct and indirect acquisitions of shares and control in listed companies. They specify requirements for public announcements, open offers, offer size, price and exemptions. Key aspects include minimum offer sizes, methods for determining offer price, disclosure obligations, and exemptions for inter-se promoter transfers and other specified cases.
This document provides an overview of SEBI Takeover Regulations, 2011 and SEBI Insider Trading Regulations, 1992. It discusses the need for SEBI takeover regulations due to changes in the Indian capital market landscape. Key definitions covered include acquirer, acquisition, control, shares, person acting in concert, enterprise value, and volume weighted average market price. The document outlines the chapter structure of SEBI Takeover Regulations, 2011 regarding substantial acquisition of shares, open offer process, other obligations, disclosure requirements, and miscellaneous provisions.
The document provides an overview of the new SEBI Takeover Regulations of 2011. Some key changes introduced include increasing the initial threshold limit for triggering an open offer from 15% to 25% and widening the scope of creeping acquisition from 15-55% to 25-75%. New definitions like acquisition, enterprise value, and frequently traded shares were also introduced. The minimum offer size was increased from 20% to 26% and the offer price calculation criteria were modified.
The document discusses various exemptions provided under the SEBI Takeover Code regulations. It explains key terms related to takeovers and the provisions of Regulations 10, 11, and 12 from which exemptions can be provided under Regulation 3. It then explores the various categories of exemptions provided under Regulations 3(1) including inter-se transfers, acquisitions in ordinary course of business, and transfers pursuant to schemes of arrangement. It also discusses conditions for availing exemptions and matters of debate addressed by SEBI in relation to certain cases.
The document summarizes key aspects of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 regarding takeover of listed companies in India. It defines important terms like acquirer, acquisition, control and outlines the regulations around substantial acquisition of shares or voting rights that trigger an open offer like acquiring over 25% under Regulation 3(1) or creeping acquisition of up to 5% annually under Regulation 3(2). It also describes the process and compliance requirements for open offers including appointment of a merchant banker, contents of public announcement, escrow account, competing offers, exemptions and general obligations of acquirers.
substantial acquisition of shares and take overs (India)92_neil
The document provides an overview of substantial acquisitions of shares and takeovers in India, including definitions of key terms, the evolution and objectives of takeover regulations, types of takeovers and triggers for open offers. It discusses topics such as acquirers, target companies, control, promoters and promoter groups. The presentation also outlines the process, pricing and obligations in public announcements and open offers.
Disclosure requirements in a listed company for us for Acquisition or Disposa...Amit Kumar
The document outlines the disclosure requirements for individuals and entities holding shares or voting rights in listed companies in India according to the SEBI Prohibition of Insider Trading Regulations 1992 and SEBI Substantial Acquisition of Shares and Takeovers Regulations 2011. It details various initial, continual and event-based disclosure requirements for individuals or entities acquiring or holding over 5% shares or crossing other shareholding thresholds. It also specifies the disclosure timelines, formats and applicable penalties for non-compliance.
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.
The document discusses the exemptions available under Regulation 10 of SEBI (SAST) Regulations, 2011 for inter se transfer of shares. It provides five categories of inter se transfers that are exempt from open offer requirements: 1) between immediate relatives, 2) between promoters for over 3 years, 3) between qualifying parties such as subsidiaries of the same holding company, 4) between persons acting in concert for over 3 years, and 5) between shareholders acting in concert for over 3 years and companies wholly owned by them. It outlines various conditions for availing these exemptions including pricing and disclosure requirements.
Acquisition of Shares & Takeover SEBI REGUL manjunath
The document outlines regulations from the SEBI Regulation Act of 1997 regarding substantial acquisitions of shares and takeovers. It establishes rules for disclosing shareholding over 5% within 2 months, requirements for public announcements and offers when acquiring over 10% of shares, pricing guidelines for offers, escrow account funding, and restrictions on acquiring shares of financially weak companies. The act aims to promote transparency and shareholder rights in business takeovers.
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.
The document summarizes key aspects of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 or the SEBI Takeover Code. It outlines the objectives of protecting shareholder interests and ensuring adequate disclosure in M&A transactions. It defines important terms like acquirer, control and persons acting in concert. It also describes provisions around periodic disclosures, open offer triggers, exemptions and timelines that must be followed for open offers.
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.
Revamping of SEBI Regulations- Delisting, Takeover and Insider TradingPavan Kumar Vijay
The document discusses proposed changes to SEBI's delisting regulations. Some key changes include determining the final exit price based on the highest price at which the promoter can reach the 90% threshold, instead of the price where most shares are tendered. Timelines for the delisting process would be shortened. Small companies with capital up to Rs. 10 crore and net worth up to Rs. 25 crore would now be eligible for direct delisting. Restrictions on promoter group share sales prior to delisting are also introduced.
The document outlines SEBI's revised takeover code for substantial acquisitions and takeovers of shares in Indian companies. Some key points include:
1. Any person acquiring over 5% of shares or voting rights of a listed company must disclose this to stock exchanges within 4 days.
2. Those holding over 10% of shares must disclose their holdings annually.
3. Acquirers of over 10-25% of shares must make a public announcement before acquiring more than 2% additional voting rights.
4. The minimum offer price in a takeover bid must be the highest of the negotiated price or average weekly stock price of the target company.
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.
The document discusses key concepts related to mergers, acquisitions, and takeovers such as:
- A merger integrates two firms on an equal basis, an acquisition involves one firm buying another to make it a subsidiary, and a takeover occurs when a target firm is acquired without soliciting a bid.
- Reasons for M&A include developing new capabilities, avoiding competition, and lower risk than internal development. Problems include integration difficulties, debt loads, inability to achieve synergies, and managers overly focused on acquisitions.
- Takeover regulations ensure minority shareholders are treated fairly during substantial acquisitions and are given an exit opportunity. The regulations mandate open offers and establish thresholds for mandatory offers.
Takeover Panorama, a Monthly Newsletter by Corporate Professionals on Takeove...Corporate Professionals
-The brief synopsis of recent Judicial Pronouncements given by the SEBI, AO, SAT, Informal Guidance and Consent orders passed in the month of December in the matter of SEBI Takeover Regulations.
-The brief synopsis of latest Open Offers given by the National as well as International Acquirers under the SEBI Takeover Regulations
-Unhide the hidden but important provision of the SEBI Takeover Regulations which generally get unnoticed on a plain reading of the regulations.
Acquisition of stake in YourNest Angel Fund by Religare Global Asset Management
Acquisition of stake in Bokaro Jaypee Cement by Dalmia Bharat
Telstra Health Acquires Business of IdeaObject
The document summarizes key aspects of amalgamation, mergers, acquisitions, and takeovers under Indian law. It outlines the procedures for amalgamation/mergers according to the Companies Act, including drafting schemes of arrangement, holding shareholder meetings, applying to courts for approval, and filing with the registrar of companies. It also describes major laws governing acquisitions and takeovers, such as SEBI regulations on substantial acquisitions and takeovers. The procedures under SEBI regulations include public announcements, letters of offer to shareholders, minimum share acquisition levels, and escrow account requirements.
This document defines mergers and amalgamations under Indian company law. It explains that a merger involves one company absorbing another, while amalgamation creates a new company from two or more existing companies. It outlines the process for calling meetings of creditors/members to approve schemes, requirements for notice and documents to be circulated. The effect and sanctions of approved schemes by the tribunal are described, including provisions for transfers of assets/shares and dissolution of companies. Penalties for non-compliance with the process are also mentioned. The section also discusses cross-border mergers between Indian and foreign companies.
M&A under New Companies Act, 2013- 04.10.14 FinalHarshul Shah
The document discusses key changes to mergers and acquisitions (M&A) under the new Indian Companies Act compared to the old act. Some high-level points include: approval of M&A schemes now requires board meeting approval; additional documents like a valuation report must be attached with notices; authorities have 30 days to provide representations on proposed deals; thresholds for shareholder objections were introduced; fees paid by transferor companies can now be set off against transferee companies. The process for schemes involving compromises/arrangements and amalgamations is now separated between sections 230 and 232 respectively.
The document discusses key concepts related to mergers, acquisitions, and takeovers such as:
- A merger integrates two firms on an equal basis, an acquisition involves one firm buying another to make it a subsidiary, and a takeover occurs when a target firm is acquired without soliciting a bid.
- Reasons for M&A include developing new capabilities, avoiding competition, and lower risk than internal development. Problems include integration difficulties, inadequate target evaluation, and inability to achieve synergies.
- Trigger points for a mandatory open offer under Indian takeover regulations include acquiring 25% or more voting rights (initial threshold) or control over a target company. Creeping acquisition is permitted between 25-75
The document summarizes the evolution of SEBI's Takeover Code regulations in India from 1994 to 2011. It provides key definitions related to acquisitions and control under the regulations. The purpose of the Takeover Code is to ensure fair exit opportunities for shareholders and fair disclosure regarding changes in shareholding and control of companies. The regulations govern direct and indirect acquisitions of shares and control in listed companies. They specify requirements for public announcements, open offers, offer size, price and exemptions. Key aspects include minimum offer sizes, methods for determining offer price, disclosure obligations, and exemptions for inter-se promoter transfers and other specified cases.
The document summarizes key aspects of Oman's proposed new regulation governing takeovers and acquisitions of listed companies. It outlines duties and obligations for key players, including:
- All parties must provide fair treatment and equal opportunity to shareholders.
- Target company boards must protect shareholder interests, seek advice, and disclose information to allow informed decision making.
- Acquirers must appoint a licensed adviser.
- Advisers must provide objective advice and ensure regulatory compliance.
- The regulation defines "acting in concert" broadly to potentially include parties working together or with relationships that could exert control together.
The document summarizes key parts of a proposed new regulation in Oman governing takeovers and acquisitions of listed companies. It outlines duties and obligations for various parties involved in M&A transactions under the proposed regulation, including directors of target companies, acquirers, and advisers. It also defines "acting in concert" broadly to include parties like a company and its directors that could inadvertently trigger mandatory takeover provisions.
The SEBI has notified new listing regulations that consolidate existing listing rules and align them with the Companies Act of 2013. The regulations replace all previous listing agreements and will be effective 90 days after publication. Two provisions regarding related party transactions and reclassification of promoters will apply immediately. The regulations divide content into substantive provisions and procedural schedules. Listed companies must sign a new shortened listing agreement within six months and the regulations apply to all listed securities on stock exchanges.
The document discusses key concepts related to takeover regulations in India. It defines terms like acquirer, target company, control, shares, thresholds for compliance, and inter-se transfers. It explains the different categories of inter-se transfers such as between relatives, group companies, and qualifying promoters. It also discusses the checks and balances in the takeover code as well as issues around preferential allotment of shares and its interaction with the takeover regulations.
The document discusses key concepts related to preferential allotment of shares under Indian law. It explains the governing regulations, pricing and timeline requirements, lock-in periods, limits on allotment to existing shareholders to avoid triggering open offer obligations under takeover regulations. Preferential allotment is presented as a simple way for companies to raise capital with minimum formalities, but strict compliance with pricing, lock-in and other norms is required.
This document discusses key concepts related to takeover code in India. It begins by defining key terms like acquirer, target company, control, shares etc. It then explains the various thresholds defined for compliance and open offer under takeover regulations. Inter-se transfer between promoters, relatives and group companies are exempted from open offer requirements. The document also discusses taxation issues related to inter-se transfers, preferential allotment of shares and compares preferential allotment with takeover code. It concludes by addressing some common queries related to calculation of shareholding post preferential allotment and compliance requirements.
Related Party Transactions by Dipti Mehta Partner Mehta & Mehta Company Secretary
Both under the 2013 Act , requirements concerning related party transactions may be divided into four key parts, viz., identification of related parties, related party transactions, approval process and disclosure requirements. It is clear from discussion below that in most cases, The definition of ‘related party’ under RC49 is likely to result in identification of significantly higher number of related party. Unlike the 2013 Act, RC49 does not exempt related party transactions from special resolution of disinterested shareholders based on criteria, viz., (i) transaction is in the ordinary course of business and at arm’s length, or (ii) prescribed threshold regarding transaction value and share capital are not breached.
Disclaimer: Disclaimer: This presentation is based on my internal research. It is notified that the presenter and any other person related to him shall be responsible for any damage or loss of any action taken based on this presentation. It is suggested to seek professional advice before initiating any action.
CORPORATE INSOLVENCY:
COMPANIES ACT 2016
Business is a combination of war and sport!!
- Andre Maurois
2
2
“
INSOLVENCY –
Insolvency – what does it mean?
Cessation of companies
New Corporate rescue mechanisms
Insolvent companies – what options are available?
1
2
3
4
Insolvency is inability to pay debts.
When a company is unable to pay its debts, it may be subject to various insolvency proceedings.
The aim of insolvency approaches is for the insolvency administrator to take over the affairs of the debtor company in order to settle the debts of the creditors and distribute the insolvency proceeds to the rightful persons in accordance with law and equity.
Receivership
Compromise & Arrangement
Reconstruction and amalgamation of companies
Insolvency : Alternative Mechanisms
Corporate recovery plans
Cessation of business
Additional measures –introduced in CA2016
The aim is to help financially distressed companies to allow them to restructure their debts, to remain as a going concern and to avoid winding up.
Corporate Voluntary Arrangement (CVA)
Judicial Management (JM)
Winding up
Members’ voluntary winding up
Creditors’ voluntary winding up
Winding up by Court (compulsory)
Striking off
RECEIVERSHIP
Let’s start by briefly discussing on how lender’s interests are protected
6
1
Receivership
“A company going into receivership would mean that its affairs are being managed by a ‘receiver’ or a ‘receiver and manager’. The company is not in liquidation except that the directors will have to surrender their rights to run the company’s business to the ‘receiver’ or ‘receiver and manager’ as a going concern”.
7
INTRODUCTION TO RECEIVERSHIP
When a financial institution / debenture holders provides a financial loan or facility (or other creditors provide credits) to a company, the financial institution would want to have some form of security to recover the debt.
One form of security is through a charge on the immovable property of the company. The charge can take a form of fixed charge or floating charge.
The fixed and floating charge will commonly be set out in the debenture. The terms of the debenture will commonly allow for the appointment of a ‘receiver’ or ‘receiver and manager’ and has duty to realise the charged assets and utilise the proceeds to repay the financial institution.
8
RECEIVERSHIP
A company goes into receivership when receiver is appointed by the debenture holder (or trustee) under a power contained in debenture or trust deed, or Court upon application.
The appointment by debenture holder is normally made in the event of a breach by the co of the conditions attached to the debentures.
The powers of the receiver under this form of insolvency administration are usually specified in a contractual agreement between the secured creditor and the company.
9
RECEIVERSHIP
A receivers’ task is to take possession of assets cover ...
The document summarizes the key recommendations of the Takeover Regulations Advisory Committee (TRAC) report on amending the SEBI Takeover Regulations. Some of the major recommendations include:
1. Providing more clarity around definitions like "acquirer", "control", and "shares" to expand the scope and remove ambiguities.
2. Increasing the threshold for "frequently traded shares" from 5% to 10% trading over 12 months instead of 6 months.
3. Replacing the term "specified date" with "identified date" to determine shareholder lists for open offers.
4. Introducing a definition for "delisting threshold" of 90% voting rights to acquire
The TRAC report provides key recommendations to amend the existing SEBI Takeover Regulations, including:
1) Providing more clarity in various definitions, inclusion of judicial decisions, and SEBI views in the regulations.
2) Increasing protections for small shareholders and opportunities for private equity investors.
3) Aligning regulations with global M&A practices, simplifying provisions around control changes, and reducing non-compete fees.
4) Addressing concerns around triggering open offer obligations.
Statutory Regulations under Company’s Act anddimpisanghavi
The document summarizes regulations around mergers and acquisitions under the Companies Act and SEBI listing agreement in India. It discusses procedures that must be followed for shareholder approval, court sanctions, minimum public shareholding levels, and takeover offer requirements. Key aspects include long approval processes, rules for reducing capital, treatment of foreign acquisitions, and disclosure obligations for listed companies undergoing a change in ownership.
The document summarizes key aspects of the evolution and framework of SEBI's Takeover Code in India, which regulates mergers & acquisitions. It outlines objectives to protect shareholder interests while facilitating takeovers. Key definitions include acquirer, control, and persons acting in concert. It describes periodic and continual disclosure requirements. Trigger points that require open offers are acquiring over 15%, 15-55%, 55-75%, or gaining control. Exemptions are provided. The public announcement and letter of offer timeline and minimum offer price and payment terms are summarized.
The document summarizes key aspects of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, also known as the Takeover Code. It outlines the objectives of the code to protect shareholder interests while facilitating legitimate takeovers. It defines important terms like acquirer, control, and persons acting in concert. It also describes provisions regarding periodic disclosures, open offer triggers, exemptions, public announcement requirements, minimum offer size and price, payment terms, and timelines that must be followed for takeover bids.
This presentation enumerates the practical aspects of merger, demerger and reduction of capital and the strategies involved therein. It also highlights certain key issues involved in corporate restructuring.
1. Corporate restructuring involves merging, demerging or reducing the capital of listed companies through schemes under Section 391-394 of the Companies Act, 1956 in order to increase efficiency or avoid competition.
2. Stock exchanges have listing agreement requirements and internal norms for approving corporate restructuring schemes, such as minimum capital and shareholding requirements, that listed companies must comply with.
3. Strategies for unlisted companies to get listed include merging with a small listed company or acquiring a regional stock exchange listed company and merging with it.
What is the procedure for corporate insolvency resolution under the IBC.pdfyamunaNMH
A recovery method made available to creditors under the Insolvency and Bankruptcy Code (IBC) is the Corporate Insolvency Resolution Process (CIRP). The concerned creditor or the corporate entity (the debtor) itself may start CIRP in the event that a corporate entity becomes insolvent (unable to repay debt).
The document summarizes key aspects of the evolution and framework of SEBI's Takeover Code in India. It discusses objectives to protect shareholder interests while facilitating takeovers. Key definitions include acquirer, person acting in concert, control. It outlines periodic and continual disclosure requirements. Trigger points for open offers are outlined, such as acquiring over 15% or consolidating holdings between 15-55%. Exemptions and requirements for public announcements, offer size, pricing and timing are summarized.
Similar to Takeover Code: A comprehensive Review (20)
The document discusses product liability in India. It covers three main points:
1) There are three types of product defects that can result in liability: design defects, manufacturing defects, and defects in marketing.
2) The concept of product liability originated in the UK case Donoghue v. Stevenson and has since been extended and codified in India through statutes like the Consumer Protection Act of 1987.
3) Under the Consumer Protection Act, producers, importers, and others involved in supplying a defective product can be held liable for any damages caused by the defect.
This document discusses inter-country adoption, including its background and growth over time. It notes that over 2.6 lakh Indian babies have been placed in inter-country adoptions in the past 3 decades. While providing children with families and opportunities, inter-country adoption also faces issues like child trafficking and a lack of regulation. The document calls for effective steps and international cooperation to ensure children's best interests and prevent illegal activities like sale and trafficking.
1) Smt. Maneka Gandhi challenged the impounding of her passport by the government without being provided reasons under Section 10(3)(c) of the Passport Act of 1967.
2) The Supreme Court ruled that Section 10(3)(c) was unconstitutional for granting vague powers without oversight and for not providing individuals a chance to defend themselves before decisions are made.
3) The Court established new standards for restrictions on fundamental rights and expanded the scope of Article 19 rights like free speech to apply abroad as well.
“ Investigating the Issues of Displacement and Rehabilitation:A case Study of...Satya Ranjan Swain
Presented in the XXXIV All India Sociological Conference on Youth, Globalization and Social Transformation held at the University of Rajstan in Jaipur, Rajstan, India on 27th to 29th of December, 2008 in a session of the ISS Ad hoc Group on Sociology of Law at the XXXIV All India Sociological Conference.
The document discusses several political topics in India:
1) Former UP chief minister Kalyan Singh accusing the BJP of keeping him in the dark about the Babri Masjid demolition in 1992 and hatching a conspiracy against him.
2) Comments criticizing the opposition for opposing everything the ruling party does and saying former PM Advani would oppose a Ram Mandir even if built by the UPA.
3) Criticism of PM Manmohan Singh for being the weakest PM and questions about what the NDA achieved when in power.
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive function. Exercise causes chemical changes in the brain that may help protect against mental illness and improve symptoms.
The document discusses the role and powers of the President of India according to the Indian constitution. It analyzes whether the President is truly a "mere figurehead" as critics have stated, or holds significant executive powers. The document examines the President's normal, military, diplomatic, legislative, financial, judicial, ceremonial, and discretionary powers, as well as emergency and ordinance-making powers, to determine the extent of the President's authority.
Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.AnnySerafinaLove
This letter, written by Kellen Harkins, Course Director at Full Sail University, commends Anny Love's exemplary performance in the Video Sharing Platforms class. It highlights her dedication, willingness to challenge herself, and exceptional skills in production, editing, and marketing across various video platforms like YouTube, TikTok, and Instagram.
Building Your Employer Brand with Social MediaLuanWise
Presented at The Global HR Summit, 6th June 2024
In this keynote, Luan Wise will provide invaluable insights to elevate your employer brand on social media platforms including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok. You'll learn how compelling content can authentically showcase your company culture, values, and employee experiences to support your talent acquisition and retention objectives. Additionally, you'll understand the power of employee advocacy to amplify reach and engagement – helping to position your organization as an employer of choice in today's competitive talent landscape.
Top mailing list providers in the USA.pptxJeremyPeirce1
Discover the top mailing list providers in the USA, offering targeted lists, segmentation, and analytics to optimize your marketing campaigns and drive engagement.
buy old yahoo accounts buy yahoo accountsSusan Laney
As a business owner, I understand the importance of having a strong online presence and leveraging various digital platforms to reach and engage with your target audience. One often overlooked yet highly valuable asset in this regard is the humble Yahoo account. While many may perceive Yahoo as a relic of the past, the truth is that these accounts still hold immense potential for businesses of all sizes.
Industrial Tech SW: Category Renewal and CreationChristian Dahlen
Every industrial revolution has created a new set of categories and a new set of players.
Multiple new technologies have emerged, but Samsara and C3.ai are only two companies which have gone public so far.
Manufacturing startups constitute the largest pipeline share of unicorns and IPO candidates in the SF Bay Area, and software startups dominate in Germany.
Storytelling is an incredibly valuable tool to share data and information. To get the most impact from stories there are a number of key ingredients. These are based on science and human nature. Using these elements in a story you can deliver information impactfully, ensure action and drive change.
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
Visit : https://www.avirahi.com/blog/tata-group-dials-taiwan-for-its-chipmaking-ambition-in-gujarats-dholera/
Company Valuation webinar series - Tuesday, 4 June 2024FelixPerez547899
This session provided an update as to the latest valuation data in the UK and then delved into a discussion on the upcoming election and the impacts on valuation. We finished, as always with a Q&A
Zodiac Signs and Food Preferences_ What Your Sign Says About Your Tastemy Pandit
Know what your zodiac sign says about your taste in food! Explore how the 12 zodiac signs influence your culinary preferences with insights from MyPandit. Dive into astrology and flavors!
The 10 Most Influential Leaders Guiding Corporate Evolution, 2024.pdfthesiliconleaders
In the recent edition, The 10 Most Influential Leaders Guiding Corporate Evolution, 2024, The Silicon Leaders magazine gladly features Dejan Štancer, President of the Global Chamber of Business Leaders (GCBL), along with other leaders.
Understanding User Needs and Satisfying ThemAggregage
https://www.productmanagementtoday.com/frs/26903918/understanding-user-needs-and-satisfying-them
We know we want to create products which our customers find to be valuable. Whether we label it as customer-centric or product-led depends on how long we've been doing product management. There are three challenges we face when doing this. The obvious challenge is figuring out what our users need; the non-obvious challenges are in creating a shared understanding of those needs and in sensing if what we're doing is meeting those needs.
In this webinar, we won't focus on the research methods for discovering user-needs. We will focus on synthesis of the needs we discover, communication and alignment tools, and how we operationalize addressing those needs.
Industry expert Scott Sehlhorst will:
• Introduce a taxonomy for user goals with real world examples
• Present the Onion Diagram, a tool for contextualizing task-level goals
• Illustrate how customer journey maps capture activity-level and task-level goals
• Demonstrate the best approach to selection and prioritization of user-goals to address
• Highlight the crucial benchmarks, observable changes, in ensuring fulfillment of customer needs
Part 2 Deep Dive: Navigating the 2024 Slowdownjeffkluth1
Introduction
The global retail industry has weathered numerous storms, with the financial crisis of 2008 serving as a poignant reminder of the sector's resilience and adaptability. However, as we navigate the complex landscape of 2024, retailers face a unique set of challenges that demand innovative strategies and a fundamental shift in mindset. This white paper contrasts the impact of the 2008 recession on the retail sector with the current headwinds retailers are grappling with, while offering a comprehensive roadmap for success in this new paradigm.
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challengesHolger Mueller
Holger Mueller of Constellation Research shares his key takeaways from SAP's Sapphire confernece, held in Orlando, June 3rd till 5th 2024, in the Orange Convention Center.
Income Tax exemption for Start up : Section 80 IAC
Takeover Code: A comprehensive Review
1. THE TAKEOVER CODE: A COMPREHENSIVE REVIEW SatyaRanjan Swain 4th yr., B.A.LL.B (Hons.), School of Law, KIIT University, Bhubaneswar. E-mail:satyaranjankls@gmail.com.
2. Contents Introduction Evolution of the takeover code in India Purpose and Scope of the code SEBI Regulations and the Bhagwati Committee Reports Report of the TRAC Comparison between the current regulations and the committee recommendations Judicial Pronouncements: Daiichi Sankyo Company Ltd. v. JayaramChigurupati and Ors. Premier Limited case OCL India Limited case Conclusion
3. Introduction Takeover- a transaction or series of transactions whereby a person (individual, groups of individuals or company) acquires control over the assets of a company, either directly by becoming the owner of those assets or indirectly by obtaining control of the management of the company. Where shares are closely held (i.e. by a small number of persons), a takeover will generally be effected, by agreement with the holders of the majority of the share capital of the company being acquired. Where the shares are held by the public generally, the takeover may be effected, (1) by agreement between the acquirer and the controllers of the acquired company; (2) by purchase; or (3) by means of a ‘takeover bid’. - M.A. Weinberg
4. Evolution Clause 40, the listing agreement Reduction of threshold limit by 10% in 1990 Clause 40 A and 40 B, the listing agreement The SEBI Act 1992 The SEBI (Substantial Acquisition of Shares And Takeovers) Regulations, 1994 The SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 First Bhagwati Committee's report SEBI Substantial Acquisition of Shares and Takeovers (Second Amendment) Regulations, 2002 Second Bhagwati Committee's report The TRAC report
5. Purpose and Scope of the Code Transperency Fairness Protection K.K. Modi v. SAT the code has been framed with a view to protect the interests of investors in securities and to promote development of and to regulate the securities market and for matters connected therewith or incidental thereto. Punjab State Industrial Corporation Ltd. v. SEBI the code has a limited role and is not meant to ensure proper management of the business of companies or to provide remedies in the event of mismanagement. The main objective of the code is to ensure quality of treatment of opportunity to all shareholders and afford protection to them.
6. SEBI Regulations and the Bhagwati committee reports Regulation 2 (b) defines “acquirer” as any person who, directly or indirectly, acquires or agrees to acquire shares or voting rights in the target company, or acquires or agrees to acquire control over the target company, either by himself or with any person acting in concert with the acquirer;
7. Person acting in concert Regulation 2(e) -persons who, for a common objective or purpose of substantial acquisition of shares or voting rights or gaining control over the target company, directly or indirectly co- operate by acquiring or agreeing to acquire shares or voting rights in or control over the target company. Paragraph 2 -deemed to be persons acting in concert, unless the contrary is established a company, its holding or subsidiary company or company under the same management either individually or together with each other; a company with any of its directors, or any person entrusted with the management of the funds of the company; directors of companies and their associates; mutual fund with sponsor or trustee or asset management company; foreign institutional investors with sub-account(s); merchant bankers with their client(s) as acquirer; portfolio managers with their client(s) as acquirer; venture capital funds with sponsors; banks with financial advisers, stock brokers of the acquirer, or any company which is a holding company, subsidiary or relative of the acquirer any investment company with any person who has an interest.
8. Chapter II -"Disclosures of Shareholding and Control in a Listed Company" Chapter III -"Substantial Acquisition of Shares or Voting Rights in and Acquisition of control over a Listed Company". Chapter III begins with Regulation 10 that makes it obligatory for an "acquirer" acquiring, in aggregate, 15% or more of the voting rights in a company, whether by acquisition of shares or voting rights, to make a public announcement to acquire shares of that company in accordance with the provisions of the Takeover Regulations.
9. Regulation 14(1) time limit within which the public announcement stipulated in Regulation 10 is to be made. The public announcement shall be made by the merchant banker not later than four working days of entering into an agreement for acquisition of shares or voting rights or deciding to acquire shares or voting rights exceeding the respective percentage specified therein. Regulation 14(4) indirect acquisition provides that a public announcement shall be made by the acquirer within three months of consummation of such acquisition or change in control or restructuring of the parent or the company holding shares of or control over the target company in India. In pursuance of the recommendation of the second Bhagwati Committee's report, Sub-Regulation (4) got inserted in regulation 14.
10.
11. Comparison- Open Offer Obligation the Current Regulations Initial Trigger 15 % Creeping Acquisition Trigger 15 % -55 %- < 5% within a financial year w/o Open offer 55%-75%- (A + PAC) -NO 2nd proviso-YES, 5%,but not 75+% Control Trigger public announcement if acquires control, irrespective of share acquisition public offer is not applicable if the shareholders approve the change in control by way of a Special Resolution. Voting through postal ballot is provided for. the Committee Recommendations 25% Promoter-25 %+ 5% each year. Up to 75% w/o open offer special resolution by postal ballot process, has been withdrawn Only route - open offer to the shareholders of the Target company.
13. Offer Size On acquisitions resulting in triggering regulations 10, 11 and 12, the acquirer is mandatorily required to make an open offer for a minimum of 20%of the voting capital. Allow all public shareholders to obtain a complete exit whenever an open offer is made. Therefore any open offer under the Proposed Takeover Regulations would be for 100%
14. Exemption from open offer obligations Applications for exeption are referred to a “takeover panel” for its recommendations. SEBI considers the recommendations received and passes an appropriate order. SEBI would continue to have the power to grant exemption. However, the requirement of making a mandatory reference to a Panel by SEBI before granting an exemption has been done away with and such requirement has now been made discretionary.
15. Withdrawal of open offer No open offer shall be withdrawn except- (a) the statutory approval(s) required have been refused; (b) the sole acquirer, being a natural person, has died; (c) such circumstances as in the opinion of SEBI merits withdrawal + an open offer may be withdrawn where any condition stipulated in the agreement for acquisition attracting the obligation to make the open offer is not met
16. Obligations of the Target Company The target company shall not, during the offer period sell, transfer, encumber or otherwise dispose of assets of the company or its subsidiaries or enter into any material contracts. - with the consent of the shareholders through a special resolution and the same rule would apply to the subsidiaries of the target company.
17. Obligations of the Merchant Banker The merchant banker shall ensure compliance of the Takeover Regulations and any other laws or rules as may be applicable in this regard. The merchant banker would be expected to demonstrate the application of due skill, care and diligence in the discharge of professional duties cast on him and the obligations of the merchant banker ought to be construed accordingly.
18. Recommendation by the independent directors The board of directors of the target company may, send their unbiased comments and recommendations on the offer(s) to the shareholders. The independent directors of the target company ought to make a reasoned recommendation on the open offer and for such recommendation, the board of the target company ought to appoint a committee of independent directors.
19. Disclosure Obligations Any acquirer who crosses the specified thresholds, have to disclose at every stage his aggregate shareholding or voting right to the company concerned and to the stock exchanges. Promoter or majority shareholder is under obligation to annually disclose to the company and the concerned stock exchange. The acquirer, promoter or shareholders shall be asked to disclose their acquisition on periodic as well as transaction specific basis, upon crossing the limits specified therein, to the Stock Exchange.
20. Judicial Pronouncements Daiichi Sankyo Company Ltd. v. JayaramChigurupati and Ors. Issues: Whether Daiichi Sankyo and Ranbaxy could be considered as 'person acting in concert'? Decision: The definition of a "person acting in concert" requires something more than the mere relationship of a parent company and a subsidiary company. “…two or more persons may join hands together with the shared common objective or purpose of any kind but so long as the common object and purpose is not of substantial acquisition of shares of a target company they would not comprise "persons acting in concert". The idea of "persons acting in concert" is not about a fortuitous relationship coming into existence by accident or chance. The relationship can come into being only by design. The appeals were allowed.
21. Premier Limited case Issue: Whether the Noticee can be considered as Acquirer as defined in Regulation 2(1)(b) of the SEBI (SAST) Regulations, 1997? Whether the Noticee is required to make Public Announcement under Regulation 11(1) and 12 of the SEBI (SAST) Regulations, 1997? Decision: Acceptance of the gift of share certificates and transfer deeds by the entity amounts to agreeing to acquire shares and the entity is an acquirer under the Regulation. But the shares which has been gifted by the transferors still stand in its name, so, it can be concluded that the transferee/noticee is not entitled to exercise voting rights and thus had not triggered Regulation 11(1). Thus the matter is disposed off.
22. OCL India Limited case Issues: What course of action should the appellant follow where the increase in shareholding is pursuant to buy back by the Target Company and there is no active acquisition by the appellants? Decision: SAT stated that the appellants would have made an application for exemption from the applicability of provision of Regulation 11. SAT dispose of the appeal with a direction to the Board to consider the appellant’s application for exemption in accordance with law.
23. Conclusion Ensuring certainty and uniformity, while adhering to the principle of equity, can be alleged as the legislative essay if we roll back to the Takeover jurisprudence in India. SEBI regulations, numerous amendments, committee reports, case laws are the evidence of this endeavor. The constitution of TRAC was another land mark set about in this regard. ..the report is not just to ‘overturn’ but is an “OVERTAKE” of the TAKEOVER code.
24. Increasing the initial trigger from 15% to 25% will enable some shareholders (like institutional investors) to increase their stakes without making an all out tender offer. The recommendations require that disclosures be made at 5%, and for every acquisition of 2% or more thereafter (i.e. potentially 10 warnings before the 25% trigger is crossed) which will make the warnings more rampant. The proposal to make an open offer for acquiring ALL the shares of the target company will create financial constraints on the acquirers. In order to maintain uniformity in the decision making process, it would be proper to continue with the existing procedure of referring all cases to the Takeover Panel rather than giving discretion to the SEBI. Moreover, before accepting the proposed regulation, it is sine qua non to harmonize other SEBI regulations.