In what circumstances can a takeover offer, once made, be withdrawn?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...
Integrated Reporting by Indian Companies
[The following guest post is contributed by Nivedita Kannan, who is an associate company secretary with a keen interest in corporate law. She can be reached at [email protected]] The Securities and Exchange Board of India (SEBI), by way of its circular issued on 6 February 2017 (Circular), advised the top 500 listed companies in India to adopt Integrated Reporting on a voluntary basis from...
Listing of Stock Exchanges and Addressing Conflicts of Interests
A few years ago, we had discussed possible issues that arise out of the commercial operations of a stock exchange. While an exchange is a profit-making institution and is required to act in the interests of its shareholders, it also carries out a regulatory role in selecting companies that are to be listed on it and thereafter in overseeing their compliance with the listing requirements. These...
Supreme Court on Board Appointments During a Takeover Offer
Background In Securities and Exchange Board of India v. Burren Energy India Limited (decided on 2 December 2016), the Supreme Court of India was concerned with a couple of issues relating to the technical interpretation of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (the “1997 Regulations”). This case involved an indirect acquisition of shares by an English...
SEBI Order in the United Spirits Case
Over the last year or so, there has been considerable discussion in the press about the allegations of diversion of funds by the erstwhile management of United Spirits Limited (USL) to other companies within the United Breweries (UB) group, including Kingfisher Airlines Limited (KFA). This was also a result of investigations conducted by USL through certain audit firms. Subsequently, this became...
SEBI Order under the Investment Advisers Regulations
A whole-time member of the Securities and Exchange Board of India passed an order involving CapitalVia Global Research Limited under the SEBI (Investment Advisers) Regulations 2013 (the “IA Regulations”). The case arose out of an inspection carried out by SEBI on CapitalVia, which resulted in an interim order being passed by SEBI on November 11, 2016. Since then, SEBI has held hearings and...
SEBI Elaborates on Board Evaluation
Along with the considerable enhancement in the duties and responsibilities of boards of directors of Indian companies that was occasioned due to the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, there has been a considerable emphasis on board evaluation as a measure of not only enhancing corporate governance in general, but also as a means...
SEBI Enhances Oversight on Schemes of Arrangement
Since 2013, the Securities and Exchange Board of India (SEBI) has exercised oversight in respect of schemes of arrangement proposed by listed companies, including schemes such as amalgamation, demerger, reduction of capital and the like (see here and here). Such oversight has now been enshrined in regulations 11, 37 and 94 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations...
ESOP Shares and the Computation of Open Offer Triggers
Under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Regulations”), an acquirer must make a mandatory open offer to acquire the shares of the remaining shareholders when the acquirer acquires shares (with voting rights) beyond prescribed thresholds. Since the triggers are based on the acquisition of shares with voting rights, questions could arise whether...
Towards a Conducive Framework for REITs – Recent SEBI Amendments
[The following guest post is contributed by Sumit Agrawal, Partner, Suvan Law Advisors and Arka Saha, a final year law Student from National Law University, Orissa. Views are personal] Although the capital and commodities market regulator, the Securities and Exchange Board of India (SEBI), had introduced Real Estate Investment Trusts (REITs) Regulations on September 26, 2014, REITs are yet to...
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