Professional Documents
Culture Documents
By Payel Jain
To protect the investors, the Takeover Code has been codified by the Securities and Exchange Board of India, the
regulator of Securities Market, which requires the promoters to give mandatory offer to the public to decide if they wish
to continue to be the shareholders of the company in the changed circumstances.
To fulfill the intent as stated above, the Code therefore ensures the following:
z Exit opportunity to the investors if they do not want to continue with the new management.
z Full and truthful disclosure of all material information relating to the open offer to enable the investors to take an
informed decision.
z Ensuring the sufficiency of financial resources by the promoters for the payment of acquisition price to the
investors.
z Timely completion of takeover formalities.
“Acquirer” - any person who, directly or indirectly, acquires or agrees to acquire shares or voting rights in the target
company, or acquires or agrees to acquire control over the target company, either by himself or with any person acting in
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Thus PACs are included in the definition of Acquirer itself and any reference to Acquirer would therefore include PACs
also.
“control” includes
“promoter” means—
(b) any person named as promoter in any offer document of the target company or any shareholding pattern filed by
the target company with the stock exchanges pursuant to the Listing Agreement, whichever is later;
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Under
Regulation Event attracting requirement of PA
z An acquirer holding 55 % or more but less than 75 % of the shares or voting rights in a target company, may
acquire, either by himself or with PACs, additional shares or voting rights entitling him up to 5 % voting rights in
the target company without making a public announcement under the SAST Regulations through open market
purchase in normal segment on the stock exchange.
z The aforesaid acquisition will be of shares or voting rights upto a maximum of 5 % voting rights in the target
company in one or more tranches, without any restriction on the time-frame within which the same can be
acquired;
z The percentage of shareholding / voting rights of the acquirer, together with persons acting in concert with him, in
the target company, shall not increase beyond 75 %.
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Regulation 7(1)
Event attracting Who shall Whom to What to
Compliance Time Limit disclose disclose disclose
On reaching
every stage of
On acquiring shres or shareholding,
voting rights entitling within 2 days of to the target
the acquirer to hold receipt of company and
together with shares intimation of the SE where
already held more allotment or the shares of
than 5%, 10%, 14%, acquisition of the Target Co. His
54% and 74% shares shares Acquirer are listed Shareholding
Regulation 7(1A)
Acquirer, purchase or
who has sale
acquired aggregating
shares or two percent or
voting rights more,
Within 2 days of a to the target alongwith the
Purchase or sale of receipt of company company and aggregate
aggregating two intimation of under sub- the SE where shareholding
percent or more of the allotment or regulation(1) the shares of after such
share capital of the acquisition of of regulation the Target Co. acquisition or
target company shares 11 are listed sale
Regulation 7(3)
the aggregate
number of
shares held by
Within 7 days To all SE each of the
of receipt of where the persons who
Shares acquired in the information shares of the have given
manner under Reg 7 under Reg 7(1) Target company are disclosure to
(1) & 7(1A) & 7(1A) Company listed the Target Co
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Regulation 8(1)
Event attracting Who shall Whom to What to
Compliance Time Limit disclose disclose disclose
Within 21 days Person
from the holding more
financial year than 15 % his holdings
Yearly disclosure of ending March shares in any To the as on 31st
shareholding 31 company Company March
Regulation 8(2)
Within 21 days
from the disclose the
financial year number and %
ending March of shares or
31, as well as voting rights
the record date held by him
of the promoter or and by
company for every person persons acting
the purposes of having in concert
Yearly disclosure of declaration of control over To the with him, in
shareholding dividend a company Company the company
Regulation 8(3)
Changes in
shareholding
of person
holding 15 %
or more
shares;
Within 30 days holdings of
from the promoter &
financial year To all SE persons
ending March where the having control
Yearly disclosure of 31, as well as Listed shares of the over the
shareholding the record date Company Co are listed company
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(i) group coming within the definition of group as defined in the M R T PAct, 1969
(ii) relatives within the meaning of Section 6 of the Companies Act, 1956
(iii) Qualifying Indian promoters and foreign collaborators who are shareholders;
ii. a registered market maker of a stock exchange in respect of shares for which he is the market
maker, during the course of market making;
9 Acquisition of shares by government companies within the meaning of Section 617 of the Companies Act, 1956
and statutory corporations
9 Pursuant to a scheme –
(i) framed under Section 18 of the Sick Industrial Companies (Special Provisions) Act,1985;
9 acquisition of shares in companies whose shares are not listed on any stock exchange
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Source : -
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