TAKEOVER CODE AMENDED
SEBI has made the amendments to the Takeover Code and broadened the definition of promoter.
Following will be counted in the “promoter group”:
In case of individual :
In case of Body Corporate :
Following will be counted in the “promoter group”:
In case of individual :
- The spouse of that person, or any parent, brother, sister, child of that person or his spouse.
- Any company in which 10% or more share capital held by the promoter or an immediate relative of the promoter or a firm or HUF in which the promoter or any one of his immediate relative is member or any company in which this company holds 10% or more shares.
- Any HUF or firm in which the aggregate share of the promoter and his immediate relative is equal to or more than 10% of the total.
In case of Body Corporate :
- A subsidiary or holding company of that body corporate.
- Any company in which the promoter holds 10% or more of the equity capital or which holds 10% or more of the equity capital of the promoter would justify as a promoter group.
- Any company in which a group of individuals or companies hold 20% or more of the equity capital in that company and also hold 20% or more of the equity capital of the target company, would qualify as part of he promoter group.
Definition of Individual Promoter has been altered to include;
- Any person who is in control of the target company, or
- Any person named as promoter in any offer document of the target company, or
- Named as promoter in any shareholding pattern filed by the target company with the stock exchanges according to the listing agreement. Whichever is later.
Notification also seeks to align the acquisition and takeover code with the recent changes to the listing agreement in relation to minimum public shareholding. The notification says no acquirer (including person acting in concert) who holds 55% or more but less than 75% of the shares or voting rights in a target company, shall acquire any additional shares or voting rights, unless he makes a public announcement (open offer) to acquire shares in accordance with these regulations. The limit of 75% will be raised to 90% in case of special categories permitted to have 10% public holding. This will prohibit creeping acquisitions within this band unless the promoters wish to go for public offer.
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