1) SEBI amended vide notification dated 30th October 2008 the Takeover Regulations Takeover to, in essence, permit an acquirer, with persons acting in concert with him, to increase his holding by 5% by acquiring additional shares or voting rights upto 5% through open market purchases or pursuant to buyback of shares by the target company. This was following a Press Release discussed here and...
Amendments to Takeover Regulations for creeping acquisitions through market acquisitions/buyback made
SEBI has amended the Takeover Regulations to permit creeping acquisitions vide a notification dated 30th October 2008. I had highlighted here the Press Release that announced the decision of SEBI for this purpose. Following some queries by readers, and also certain points by Mr. Umakanth, more specifically on a concern expressed by me on whether increase in percentage holding arising out of...
Would increase in percentage holding because of buyback trigger the Takeover Regulations?
(Note:- SEBI had issued a press release on October 27, 2008, that I had discussed here, whereby, inter alia, SEBI announced its decision to exempt increase in shareholding on account of buyback upto 5% from applicability of creeping acquisition requirements. I had pointed out that a view is possible to hold that the increase on account of buyback should not trigger the Takeover Regulations and...
Systemically Important Non-Deposit accepting NBFCs allowed to raise funds by Perpetual Debt Instruments
Reserve Bank of India has amended, vide a circular/notification, the Directions relating to acceptance of deposits and Prudential Norms for Non-Deposit accepting NBFCs and has enabled raising of funds through Perpetual Debt Instruments by systemically important non-deposit accepting NBFCs. This would help them, inter alia, raise their Capital for capital adequacy purposes. It would help such an...
Creeping acquisition allowed between 55-75%/increase through buyback exempt upto 5%
Vide a press release dated October 27, 2008, SEBI has announced its decision to allow upto 5% creeping acquisitions between 55%-75% holding. However, the creeping acquisition between this slab can be only by “open market purchases in the normal segment” and not through bulk/block/negotiated deals or through preferential allotment. It is not clear whether a person holding between 50 and 55% and...
Amendment to Clause 49 – some thoughts
Some thoughts on the amendment to clause 49 vide circular dated 23rd October 2008 as referred to in my earlier brief note here. Clause 49 of the Listing Agreement requires that the Board of a listed company should consist of at least 50% non-executive directors. Further, if the Chairman is an Executive Director, at least 50% of the Board members should be Independent Directors and one-third...
Amendments to Clause 49 of Listing Agreement
SEBI has issued a circular dated 23rd October 2008 and amended 49 of the Listing Agreement to provide a clarification regarding independent directors. The clarification is to the original circular which, inter alia, provided for change in the proportion of independent directors depending on whether or not the Chairman is a Promoter or related to the Promoters, etc. This amendment provides an...
Unique avoidance of Takeover Regulations in RIL?
How can Promoters hold shares in a listed company but still ensure that they are not counted as part of Promoters’ holding for purposes such as Takeover Regulations which place various limits over creeping acquisitions, maximum holding, etc.? While there could be many ways, but to talk of something current, if one goes by comments (here) by CNBC’s correspondent Sajeet Manghat regarding RIL , it...
Forced buybacks are back?!
Can a company buyback the shares of its public shareholders without their express consent? At a price fixed by the company? At a price that is far below the market price at the time of buyback? When the buyback is selective and applicable only to the public shareholders, mainly the small shareholders? Yes, Yes, Yes and Yes!!!! This is as also seen as a recent case (Elpro International Ltd., In re...
Some thoughts on the NBFCs Auditors Report Directions 2008 – II (concluded)
(second and concluding part) Having considered some basic concerns, let us consider a few areas relating to the 2008 Directions. Essentially, the requirements are just a few if one groups them. The Auditors are required to report on compliance generally relating to registration. For example, has the NBFC registered itself with the Reserve Bank of India if it is required to do so? The reverse...
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