TagMergers and Acquisitions

SEBI Refrains from Resolving Ambiguity on Permissible Investor Protection Rights

[The following post is contributed by Supreme Waskar, who is a corporate lawyer in Mumbai. An earlier post on this topic is available here.] The existing definition of control under regulation 2(1)(e) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the “Takeover Regulations”), defines “control” in inclusive manner as a right to (a) appoint a majority of...

“Control” Untouched in the Takeover Regulations: A Case of Regulatory Inertia

Let’s just say, it is not at all surprising. After carrying out an extensive consultation that lasted more than a year with a view to defining the concept of “control” under the SEBI (Substantial Acquisition and Takeovers) Regulations, 2011 (the “Takeover Regulations”), the Securities and Exchange Board of India (“SEBI”) has come around a whole circle. It has, by retaining the current definition...

Conflicts and Gaps in Regulatory Aspects of Schemes of Arrangement

[Guest post by Purvi Khanna, a 4th year student at NALSAR University of Law, Hyderabad.] The Ministry of Corporate Affairs’ recent notifications formalise an overhaul in the procedure for Schemes of Arrangements (“SoA”). . This post attempts to shed light on certain commercial aspects, and the inconsistencies and overlaps in the provisions of the Companies Act 2013 (the “Act”), the...

Analysis of the Material Adverse Change Clause in the Indian Context

[Guest post by Tushit Mishra, who is a Third Year Student at NALSAR University of Law] Introduction The economic viability of an agreement in securities transactions is subject to a wide range of factors, due to which agreements concerning mergers and acquisitions (M&A) are constantly under a cloud of uncertainty. The past realization of such uncertainty with regards to risk mitigation and...

Takeover Disclosures: Single Penalty for Violation of Single Obligation

[The following post is contributed by Supreme Waskar, who is a corporate lawyer in Mumbai] The Securities and Exchange Board of India (“SEBI”) has, by way of its order passed on July 28, 2017 (“Recent Order”), reversed its earlier view and held that the disclosure obligation under regulation 8(2) of the erstwhile takeover norms, i.e., Securities and Exchange Board of India (Substantial...

Holding Period and Corporate Veil in a Takeover Offer

[Guest post by Vaneesa Agrawal, who is Partner, Suvan Law Advisors. She can be reached at info@suvanlaw.com.] Last week Supreme Court of India issued a significant judgement in the matter of Laurel Energetics Pvt. Ltd. v. SEBI, Civil Appeal No. 5675 of 2017 on the issue of the interpretation of Regulation 10 of the SEBI (Substantial...

Consolidation of Promoter Holdings: Exemptions from Takeover Offer

The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the “Takeover Regulations”) provide for a series of exemptions involving consolidation of promoter shareholdings whereby acquirers of shares in such consolidation efforts need not make a mandatory takeover offer to acquire the shares of the remaining shareholders. Apart from specific promoter-oriented exemptions...

A Closer Look at the Cross-Border Mergers Regime in India

[Post by Suprotik Das, a 5th year law student at the Jindal Global Law School, Sonepat, Haryana.] April 13, 2017 marked a momentous event in the cross-border merger regime in India with the Ministry of Corporate Affairs notifying section 234 of the Companies Act, 2013 as well as amendments to the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 in the form of Rule 25A. Read...

Companies Act, 2013: Cross-Border Merger Provisions Notified

Under the previous Companies, Act, 1956 (sections 391-394) it was possible for a foreign company to merge with an Indian company, but an Indian company could not be merged with a foreign company. This was intended to ensure that the company that continues after the merger is an Indian company over which the Indian regulatory authorities continue to exercise control. This position was also...

Has SEBI Altered Its Position on the Question of “Control”?

The issue of what amounts to “control” for purposes of the SEBI Takeover Regulations has been a vexed one, and has eluded any form of resolution for nearly 15 years. In a paper titled “The Nature of the Market for Corporate Control in India”, I have sought to summarize the present position (footnotes omitted): Under Indian takeover regulation, it is possible to trigger the [mandatory bid rule...

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