Background and Context Under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and its previous version of 1997, it is possible for a person to trigger the mandatory takeover offer requirement even without acquiring a single share in the company. This is because the person may be in “control” of the company as defined in the Takeover Regulations, which is determined...
Papers on Comparative Corporate Law and Governance in Asia
Hostile Takeover Regimes in Asia: A Comparative Approach, which I have co-authored with Wai Yee Wan. The abstract is as follows: “The market for corporate control (operating through hostile takeovers) acts as a key corporate governance mechanism to discipline corporate managers. However, the process and substance of regulating hostile takeovers differs remarkably among various jurisdictions...
Scope of Exemptions from Open Offer in case of Foreign Merger Transactions
[Supreme Waskar & Sumit Agrawal are lawyers from Suvan Law Advisors. Views are personal.] The Securities and Exchange Board of India (“SEBI”) in its recent informal guidance dated October 30, 2017 in the matter of Linde India Limited (“LIL”) has held that ‘review of merger process’ by ‘competent authorities’ will not exempt the proposed merger from the obligation to make an open offer under...
Private Equity Investors as Promoters in an Initial Public Offer
[Guest post by Rashmi Ramanath, who is a 5th year B.A., LL.B. (Hons.) student at Jindal Global Law School in Sonipat] The Initial Public Offering (IPO) of SKS Microfinance was a first of its kind. It was for the first time that a group of four venture capitalists led by Sequoia Capital India were named as promoters to an issue. Vikram Akula, one of the company’s founders, owned a 6% stake in the...
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...
Corporate Insolvency Resolution Process and Implications on Securities Laws: Recent Changes
[Guest post by Yogesh Chande, Partner, Shardul Amarchand Mangaldas. View of the author are personal] SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Regulations”) The newly inserted provision in regulation 10 of the Takeover Regulations, notified on 14 August 2017, exempts an acquisition pursuant to a resolution plan approved under section 31 of...
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 [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...
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