New regulations on delisting have been approved by SEBI. I wrote a column on December 1, 2014 (print edition) of the Business Standard, on how a new element of requiring at least 25% of the public shareholders as of a certain date to have participated in selling their shares, would nudge toward counter-productive outcomes. I have pasted the copy below. Earlier, Umakanth had commented...
SEBI Reforms – Part 2: Delisting
Delisting of securities tends to be somewhat controversial given that it represents the tension between the interests of the controlling shareholder who want to delist the company and the interests of minority shareholders who are caught between the options of exiting the company at the offered value or remaining in the company without the liquidity and protections that a stock exchange listing...
“Make in India” frustrated by regulations “Made in India”
The Delisting Regulations applicable in India have been controversial since inception. Earlier this year, SEBI published a discussion paper seeking to review them. This Blog commented on the discussion paper here. Earlier this week, in my column in Business Standard, I wrote about how tinkering with the Delisting Regulations will not be of help. The Delisting Regulations is a body of...
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...
Proposal to Overhaul Delisting Regime
Delisting of companies from the stock exchange (also known as privatization) has become a common phenomenon around the world, as it has in India. The rationale for delisting a company is detailed below: A number of reasons are proffered as motivations for delisting. Where there is a perception that the market price of the company is not reflective of the true value of its businesses, share price...
Update on Delisting of Fresenius Kabi Oncology Limited
[The following post is contributed by Yogesh Chande, who is a Consultant with Economic Laws Practice, Advocates & Solicitors. Views of the author are personal] On 22 July 2013, the SEBI whole time member passed an order in relation to the proposed voluntary delisting of Fresenius Kabi Oncology Limited (Target Company) by its promoters in accordance with the SEBI (Delisting of Equity Shares)...
Fresenius Kabi: SEBI Order on Delisting
[The following post is contributed by Yogesh Chande, who is a Consultant with Economic Laws Practice, Advocates & Solicitors. Views of the author are personal] It may be recalled that, pursuant to an announcement issued by Fresenius Kabi Oncology Limited (target company) on 30 May 2012, the stock exchanges were informed that its promoter shareholders have notified the target company of their...
Warrants and Voting
My friend Jayant Thakur posted a critique on July 31 on the recent SEBI Order in the case preferential allotment of warrants to promoters. Umakanth dealt with the element of potential prohibition of voting in areas of conflict of interest on August 1. Here is a piece I wrote in the Business Standard today, with a slightly different perspective on the concept of preferential allotment and deals...
Delisting Regulations could make fresh delistings an impossibility
Today’s Business Standard published this column from me on the newly notified SEBI (Delisting of Equity Shares) Regulations, 2009. The new law makes delisting next to impossible.
Draw the line clearly for public shareholding
Last week the Economic Times reported here that listed companies would soon have to increase their public shareholding levels – possibly by 3 – 5% annually until they become compliant with continuous listing requirements. Whether the minimum public float should be 25% or 20% is a matter of policy wisdom. The law always has to draw a line somewhere and treat people on either side of the line...
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