Background and Facts Last month, the Supreme Court had the occasion in SEBI v. Akshya Infrastructure Pvt. Ltd. to consider the narrow question of the whether “an open offer voluntarily made through a Public Announcement for purchase of shares of the target company can be permitted to be withdrawn at a time when the voluntary open offer has become uneconomical to be performed”, which it answered...
Further Tax Scrutiny of Mergers
In the last few years, mergers of companies (undertaken through schemes of arrangement that require the approval of the High Court) have been subject to greater scrutiny by the tax authorities. One example of a merger that was strongly objected to by the tax authorities is the case involving Vodafone Essar Gujarat Limited (discussed here), although the scheme was sanctioned on appeal to a...
Guest Post: CCI Amends Merger Control Regulations
[The following post is contributed by Karan Singh Chandhiok, Head of Competition Law and Dispute Resolution, Chandhiok & Associates, Advocates and Solicitors; and Vikram Sobti, Senior Associate with the firm. The authors may be contacted at [email protected] and [email protected] respectively] On 28 March 2014, the Competition Commission of India (CCI) issued a...
Delaware Standard for Controlled Company Mergers
Delaware courts have long been considering disputes pertaining to mergers between companies and their controlling shareholders. Not only do such mergers involve related party transactions but they are also used as a means to squeeze out the minority shareholders of the target who are cashed out as part of the merger. In one of the first decisions that permitted minority shareholders to bring...
Withdrawal of a Takeover Offer
[The following post is contributed by Yogesh Chande, who is a Consultant with Economic Laws Practice, Advocates & Solicitors. Views of the author are personal] In an interesting order passed on February 20, 2014, the whole time member of the Securities and Exchange Board of India (SEBI) has refused the withdrawal of an open offer made by the acquirers under the erstwhile SEBI...
Scheme of Arrangement: Notice to Central Government
Since a scheme of arrangement, once sanctioned, becomes binding on all shareholders and creditors a company and also has wider impact, company law prescribes a stringent process for the same. One such is the requirement that the court must issue notice to the Central Government under section 394-A of the Companies Act, 1956 and take into consideration any representations that the Government may...
SAT on Acquisitions by Persons Acting in Concert
Background In a recent decision, the Securities Appellate Tribunal (SAT) ruled on the acquisition of shares by a person acting in concert (PAC) with other shareholders, and whether an increase in the individual shareholding of that person beyond 15% triggered a mandatory open offer requirement under the erstwhile SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (the 1997...
Takeover Regulations: Intention to Acquire
[The following post is contributed by Yogesh Chande, who is a Consultant with Economic Laws Practice, Advocates & Solicitors. Views of the author are personal] In an order passed by the SEBI, Adjudicating Officer in the context of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations (SEBI Takeover Regulations), the Adjudicating Officer relying upon a decision of the...
Paper on Private Equity in India
In the past, some readers have asked if we could cover matters pertaining to the private equity sector in greater detail. Often, the difficulty we encounter is that private equity is not recognised specifically as an investment class under the Indian laws and regulations. As far as foreign private equity investments are concerned, they are generally treated as part of the foreign direct...
SPEL Semiconductor: SEBI’s Exemption from Open Offer
[The following post is contributed by Yogesh Chande, who is a Consultant with Economic Laws Practice, Advocates & Solicitors. Views of the author are personal] SEBI’s Whole Time Member has passed an order dated 6 September 2013 granting an exemption to Natronix Semiconductor Technology Private Limited (Acquirer – a company incorporated in Singapore) from making an open offer [regulation 3(1)...
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