SEBI decides not to tinker with connotation of 'control' under Takeover Code
Published: Sep 08, 2017
By TIOLCORPLAWS News Service
MUMBAI, SEPT 08, 2017: Ascertaining acquisition of ‘control' under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations) requires consideration of facts and circumstances of each case. This results in a multitude of opinions. In view of the same, it was decided by the SEBI to explore adoption of bright-line tests for acquisition of ‘control' under the Takeover Regulations. In this regard, a discussion paper was issued on March 14, 2016 seeking public comments on certain proposals contained therein. A number of comments from various stakeholders including industry bodies, intermediaries, advocates and investors were received. A mixed response has been received wherein no particular option has garnered overwhelming support amongst the stakeholders.
SEBI felt that any change or dilution in the definition of control would have far reaching consequences since a similar definition of 'control' is used in the Companies Act, 2013 and other laws. The relevant issues have been examined intensively and in view of the comments received and considering the current regulatory environment, it has been decided to continue with the practice of ascertaining acquisition of ‘control' as per the extant definition in the Takeover Regulations.