Sebi tightens takeover norms to protect investor interests
To safeguard the interest of small shareholders vis-a-vis promoters and other large investors during company takeovers, market regulator Sebi today brought the entities holding more than five per cent stake under its insider trading regulations.
Tightening its takeover regulations, Sebi also said the price offered to the public shareholders and the price for preferential allotment would need to be decided on basis of the prevailing market price on the earliest date when the company's board approves the transaction.
Sebi Chairman U K Sinha said that some decisions have been taken related to preferential as well as shareholder arrangements related to takeover regulations at its board meeting today here.
To bring parity in disclosure requirements among various market norms, Sebi also decided to align takeover related disclosures with that of insider trading norms.
"... the disclosure requirement with regard to buy or sell two per cent by persons holding more than five per cent as specified in Takeover Regulations, 2011 shall be modified in line with Sebi (Prohibition of Insider Trading) Regulations, 1992," Sebi said.
The market regulator also said that where open offer obligations are triggered -- pursuant to an agreement or otherwise in combination of any modes of acquisition -- the relevant date for making the public announcement and determination of offer price would be the "earliest date on which obligations are triggered".
"This will, however, not be applicable if the subsequent trigger is on account of willful and deliberate act on the part of the acquirer," it added.
Sinha emphasised that this would avoid any
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