MUMBAI: The Securities and Exchange Board of India (SEBI) on Friday eased takeover norms for companies whose boards have been superseded by the government, under which suitors need not make an open offer.
SEBI amended the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, allowing companies a special status in the bidding process. following the scam tainted Satyam was taken over by the Government in January. This would help the newly appointed board find a bidder as well as a realistic bidding price for the company.
These regulations may be called the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2009, and it has come into force from Friday.
In the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, (i) in regulation 25, after sub-regulation (2A), a new sub-regulation has been inserted, namely, (2B). “No public announcement for a competitive bid shall be made after an acquirer has already made the public announcement pursuant to relaxation granted by the Board in terms of regulation 29A”.
Further, in the same regulation, after regulation 29, the following regulation has been inserted, namely, “Relaxation from the strict compliance of provisions of Chapter III in certain cases. 29A:
The board may relax any or more of the provisions of this Chapter, subject to such conditions as it may deem fit, if it is satisfied that
(a) the Central Government or State government or any other regulatory authority has removed the board of directors of the target company and has appointed other persons to hold office as directors for the time being for orderly conduct of the affairs of the target company;
(b) such directors have devised a plan which provides for transparent, open, and competitive process for continued operation of the target company;
(c) the conditions and requirements of the competitive process are reasonable and fair;
(d) the process provides for details, including the time when the public offer would be made, completed and the manner in which the change in control would be effected; and
(e) the provisions of this Chapter are likely to act as impediment to implementation of the plan of the target company”.
No comments:
Post a Comment