SEBI

 

Securities and Exchange Board of India (abbreviated as SEBI) is the amended  form of Substantial Acquisition of Share and Take Over, The Take Over Code of 2011 adhere to the principles of the Takeover code. There are such most important amendment are given below-

    1. Initial threshold limit for triggering of an open offer

    2. Cripping acquisition 

    3. Indirect acquisition

    4. Voluntary Offer

    5. Size of the open offer

    6. Important exceptions from the requirement of the open offer

    Discussing in details:

    1. Initial threshold limit for triggering of an open offer-before the amendment of Takeover code 2011 the share holders were acquiring fifteen percent of more of voting in the target company and this percentage has been increased up to ten percent i.e. twenty five percent as per the Takeover Code 2011. That is why private equity funds and minority foreign investors will be able to increase their share holdering and it also listed up to 24.99% and it has a better chance to take any decision widely and for this purpose company requires a special resolution to be passed.

    2. Creeping acquisition-It has two levels, first is from fifteen percent to fifty five percent and another is from fifty-five percent to the maximum permissible limit of seventy-five percent. The first one share was allowed to purchase additional voting rights of up to five percent per financial year without any public announcement of an open offer. In the other hand another required to make such public announcement for additional purchasing the shares. However the five percent shares could be purchased without any announcement at all. This would be beneficial for the investors like promoter, who can increase their shareholding in the company without purchasing from the stock market.

    3. Indirect acquisition :-

      4. EXISTING REGULATION
      PROPOSED REGULATION

      Presently indirect acquisition are treated separately on the basis of the size of the business indirectly brought and there relative important to the overall acquisition.

      The open offer is still required to be made when there is a direct and indirect charge of control of the target, company irrespectively of any direct acquisition of the share of target company.

      If indirectly acquired target the company is predominant part of business of the parent company /master company being acquired of accounts for more than eighty percent of its and sales turnover of that deal value to be treated as direct acquisition.

      Presently indirect acquisition are not treated on the basis size of the business brought in directly

    4. Voluntary offer-It has been introduced after taking over of 2011 and by which acquirer who holds more than twenty five percentages and less than the maximum permissible limit and it shall be voluntarily announced of an open offer for acquiring the shares additionally.

    5. Size of the open offer-It was the obligation for making an open offer for minimum twenty percent of the “voting capital of the company” and the limitation of expiration was15 days after closure of the public offer as per the Takeover Code 1997.There after It amended By the Take Over Code 2011, now it mandates as an acquirer can place the offer at least 26% of total shares of the target company and the limitation for closing that tendering period is within 10th working days. When the increasing rate in the size of open offer would be between 20% to 26% and contemporarily the initial threshold from 15% to 25% in that unique situation under that code (2011) an acquirer with 15% and increasing 20% then he/she can got 35% share holding in the target company.

    6. Important exceptions from the requirement of open offer- SEBI Take over regulations are containing the most important provision as to exempt from the requirement from open market, in accordance with these provisions are any acquirer who acquires the shares and it has obligatory to him to declared as public announcement and he could not except automatically for exception, he has to file an application to SEBI, then SEBI would deem that application either they accept or reject. Take over exemption in many cases the arena consists of mentioned below:-

      1. Analyzing the facts and circumstances of the case.

      2. Structuring and Drafting  the case and finalize the grounds for exemption and making presentation before SEBI official

      3. Explaining them the case and facts and circumstances etc.

      4. Meeting SEBI Official along with Company personnel (if required) and if thereby having necessary for Personnel appearance before the committee and handing of all further queries and correspondences also.

      Submission of replies to the queries received from SEBI and having gone through  the petitions, facts and circumstances and deemed and pronouncement the decision (if any other task, as may be necessary, for pronouncement of the Exemption Application).