SEBI Order on Delisting

A few weeks ago, we
discussed
SEBI’s proposals to overhaul the delisting regime. Evident from
that discussion were difficulties faced in the current delisting regime. Some
of those difficulties have surfaced in an order
issued by SEBI yesterday involving the delisting of AstraZeneca Pharma India
Limited. SEBI’s order alleges a concerted action between the controlling
shareholder of the target and a large minority shareholder (who is a financial
investor). SEBI has therefore called upon the stock exchanges to closely
monitor the delisting process, and to ensure that it has been fair and
transparent.

This case offers some further insight into the
types of issues previously discussed, including possible influence by large
minority shareholders who can play a dominant role in the delisting. At the
same time, it must be noted that this order is only an interim one, and SEBI
has sought to examine the issues further. 

About the author

Umakanth Varottil

Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.

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