The securities and exchange board of India SEBI has announced that it would refrain from amending the takeover regulation to specify situations in which it would rule that there is no change as control over a listed company. This is the right step for a variety of reasons.
When one company acquires control over the management and policy decisions of a listed company, an offer to buy shares from the shareholders is mandatory. Likewise, acquisition of shares with voting rights of 25% or more mandatorily triggers and open offer. Typically, acquisition of control occurs along with acquisition of shares. However, the regulations contain a provision that makes it and the obligation to make an open offer when acquiring control regardless of the quantum of shares acquired.
This is an important regime. One can acquire control without crossing the 25% voting rights that would trigger an open offer. This could text shapes and forms that cannot be e predicted in advance-through contractual rights and arrangements embedded in documents to which the listed companies are bounded. Now, when investors execute investment agreements with listed companies and the desired degree of say in decisions that could alter the very foundation of the company they invested in. For example, if a company that manufactures Steel, and investor secure speak contractual right to stop it, that would not represent the capacity to control the date to day management of the company.
Life is never Led in either extreme, but there is a lot of truth in between the two extremes. For example, an investor, meat security right to object transaction that is is a substantial component of the value of the net worth of the company, in other words, the right to scuttle risky proposition. What the size of the network is and how much percentage of it is a threshold.
But I know that it when I see it, and the motion picture involved in this case it is not that
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