[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 [email protected].] 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 Acquisition of Shares and Takeovers) Regulations, 2011...
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...
SAT on Holding Period for Inter Se Promoter Transfers
Mandatory takeover offer requirements are subject to certain exemptions. One such exemption is when there is an inter se transfer of shares among promoters of a company, so long as certain conditions are satisfied. One such condition, stipulated in regulation 10(1)(a)(ii) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the “Takeover Regulations”), is that the...
MCA’s Notification for Enhanced Exemptions Under the Merger Control Regime
[Guest post by Varun Thakur, BA.LL.B fourth year student at National Law University, Jodhpur.] In a notification dated 27 March, 2017, the Central Government, exercising its powers under the Competition Act, 2002 (‘the Act’), has issued a notification containing certain clarifications for easing compliance under the merger control regime. These interpretations are aimed at ensuring the...
SEBI Order Denying Inter-se Promoter Transfer Exemption
[Guest post by Shashank Prabhakar, who is a lawyer with Finsec Law Advisors] The Whole Time Member of the Securities and Exchange Board of India (SEBI) recently passed an order relating to an application under Regulation 11(5) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the Takeover Regulations) for exemption from making an open offer under Regulation 3(2)...
Supreme Court Reinforces Sanctity of a Takeover Offer
In what circumstances can a takeover offer, once made, be withdrawn? This issue has occupied the attention of the Supreme Court in two previous cases, Nirma Industries v. Securities and Exchange Board of India and Securities and Exchange Board of India v. Akshya Infrastructure Pvt. Ltd. In these cases, the Supreme Court took a strict view and held that the acquirers were not permitted to withdraw...
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