LISTED COMPANIES MUST SEEK SEBI NOD FOR ALL M&A DEALS

Companies traded on stock exchanges will now need the clearance of the capital market regulator Securities & Exchange Board of India (SEBI) for all merger, demerger and amalgamation deals. Till now, companies could execute these strategies by obtaining the approval of a high court and no-
objection certificate from exchanges.

The following has been instructed by SEBI to companies before executing M&As & demerger:-

• Include non-objection certificate of stock exchanges in the letter sent to the shareholders for approval.
• Obtain the approval of at least two - third of the minority shareholders.
• Disclose the scheme valuation report of independent Chartered Accountant(s) (CAs), fairness opinion and audit committee on the scheme for public scrutiny for 21 days.