While reading the Supreme Court’s judgment in the Daiichi case, which Mihir has discussed here, I was particularly struck by certain observations of the court that appear at the end of the judgment. The case involved an intensive reading and close interpretation of the provisions of the SEBI Takeover Regulations. Here are the relevant observations: 57. Before parting with the records of the case...
Supreme Court on Takeover Regulations: Daiichi appeals allowed
A three-Judge bench of the Supreme Court has delivered its judgment (per Aftab Alam J.) in Daiichi Sankyo v. Chigurupati and Daiichi Sankyo v. Narayanan (Civil Appeal No. 7148/2009 and Civil Appeal No. 7314/2009, judgment dated 8 July, 2010); where the Supreme Court has in a common judgment allowed appeals against orders of the SAT in cases involving interpretation of the Takeover Regulations...
UK: Consultation Paper on Takeover Bids
While the SEBI Takeover Regulations in India are a subject-matter of detailed review, elsewhere in the U.K. there are proposals for amending certain aspects of the City Code on Takeovers and Mergers. These changes have been necessitated on account of the widespread debate that followed the takeover of Cadbury plc by Kraft Foods Inc. early this year. Towards that end, the Code Committee of the...
SEBI Order on Shareholding Disclosures
On March 8, 2010, SEBI passed an order in the case of Bank of Rajasthan (BoR). SEBI commenced investigation into the shareholding pattern of BoR following a reference received from the Reserve Bank of India (RBI). Pursuant to the RBI Guidelines on Ownership and Governance in Private Sector Banks dated February 28, 2005, the promoters of BoR were required to reduce their shareholding in the...
Buyback and Takeover Regulations – Yet another development
See my earlier post on a recent decision of SEBI on whether increase in percentage holding consequent to buyback of shares would amount to “acquisition” under the Takeover Regulations. If that and earlier posts are reviewed, one would note that SEBI has taken a fairly consistent stand that such increase does amount to acquisition. Now, in a recent order granting exemption under the...
Relief for Investor Community on “Control” Debate
Background Under the SEBI Takeover Regulations, there are two methods by which an acquirer could be obligated to make an open offer to the public shareholders of a listed target company. The first is when the acquirer acquires shares or voting rights beyond certain defined thresholds (as contained in Regulations 10 and 11, with the initial threshold being 15%). The second is when the acquirer...
SAT on indirect acquisitions – correct in letter and spirit
Earlier this month, the Securities Appellate Tribunal (“SAT”) opined on the computation of the minimum offer price for an indirect takeover of a listed company. An interesting critique of this opinion was published on this blog the next day. The SAT had disposed of two appeals (Appeals No. 137 and 139 of 2009) by a common order. I respectfully disagree with the critique on the blog. In my view...
Indirect Acquisitions and Determination of Open Offer Price
(The following post has been contributed by Avinash Balasubramaniam, who is an alumnus of the ILS Law College and a practising lawyer based in Chennai) The Securities Appellate Tribunal (SAT) yesterday delivered its verdict in the Zenotech open offer case directing Daichi to offer Rs.160/share to the shareholders of Zenotech. So is Dr. Jayaram Chirugupati, the chief protagonist in the challenge...
Contestability of Corporate Control
In a column in the Business Standard, Nitin Desai argues that the current ecosystem in India provides greater benefits to corporate control, resulting in a number of large Indian companies being managed by the promoter-owners. Corporate control may be susceptible to challenge if there is a market for control facilitated by a liberal takeover regime. However, as we have seen (here and here), the...
Inputs and Suggestions to TRAC
The Takeover Regulations Advisory Committee (discussed earlier) has invited inputs and suggestions regarding suitable amendments to the SEBI Takeover Regulations. This is part of the committee’s consultative process. Suggestions are due in the prescribed format by October 31, 2009. The background for the proposed amendments is as follows: There have … been various prominent judgments by Hon’ble...
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