SECURITIES AND EXCHANGE BOARD OF INDIA (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) (AMENDMENT) REGULATIONS, 2013

Notification No.: LAD-NRO/GN/2012-13/36/7368

Date: 26/03/2013

In exercise of the powers conferred under  the Securities and Exchange Board of India Act, 1992, the Board hereby makes  the following Regulations to amend the Securities and Exchange Board of India (Substantial  Acquisition of Shares and Takeovers) Regulations, 2011, namely:-

1.   These regulations may be called the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2013.

2.   They shall come into force on the date of their publication in the Official Gazette.

3.   In the Securities and Exchange Board of India (Substantial Acquisition of Shares and  Takeovers) Regulations, 2011 ─

a.   in regulation 10(3),

                                      i.        After the words "buy-back of shares", the words "by the target company” shall be inserted.

                                    ii.        For the words "on which the voting rights so increase” the words "of the closure of the said buy-back offer", shall be substituted.

b.  in regulation 10(4), in the second proviso to clause (c), for the words "on  which the voting rights so increase” the words "of closure of the buy-back offer by the target company", shall be substituted.

c.   in regulation 13(2),

                                    i.       in clause (g) for the words, figures and numbers "special resolution is  passed for allotment of shares u/s 81(1A) of  the Companies Act, 1956 ” the words "the board of directors of the  target company authorizes such preferential issue.", shall be substituted.

                                    ii.        in clause (h) for the words and numbers "such increase in the voting  rights beyond the relevant threshold stipulated in regulation 3” the  words "closure of the  buy-back offer by the target company ", shall be  substituted.

d.   After regulation 13(2), the following new sub-regulation shall be inserted,  namely-

“(2A) Notwithstanding anything contained in sub-regulation (2),  a  public announcement referred to in regulation 3 and regulation 4 for a  proposed acquisition of shares or voting rights in or control over the  target company through a combination of,-

                            i.        an agreement and any one or more modes of acquisition referred to in regulation 13(2), or

                                     ii.        any one or more modes of acquisition referred in clause (a) to (i) of regulation 13(2),  

Shall be made on the date of first such acquisition, provided the acquirer discloses in the public announcement the details of the proposed subsequent acquisition."

e.   After Regulation 22(2), the following new sub-regulation shall be  inserted, namely-              

“(2A) notwithstanding anything contained in sub-regulation (1), an acquirer may acquire shares of the target company through preferential issue or through the stock exchange settlement process, other than through bulk deals or block deals, subject

to,-

                                              i.          such shares being kept in an escrow account,

                                    ii.        The acquirer not exercising any voting rights over such shares kept in the escrow account.

Provided that such shares may be transferred to the account of the acquirer, subject to the acquirer complying with requirements specified in sub-regulation (2)."

f.  In Regulation 23(1)(c), the following proviso shall  be inserted, namely-

“Provided that an acquirer shall not withdraw an open offer pursuant to a public announcement made under clause (g) of regulation 13(2), even if the proposed acquisition through the preferential issue is not successful.”

g.   In Regulation 29(2), the following shall be substituted:

"Any person, who together with persons acting in concert with him, holds shares or  voting rights entitling them to 5% or more of the shares or voting rights in  a target company, shall disclose the number of shares or voting rights held and  change in shareholding or voting rights, even if such change results in shareholding  falling below 5%, if there has been change in such holdings from the last  disclosure made under sub-regulation (1) or under this sub-regulation; and such  change exceeds 2% of total shareholding or voting rights in the target  company, in such form as may be specified."

Regards

CA. Mona Singhal
Partner

Arpit Gupta & Associates
Chartered Accountants

701, Nirmal Tower,
26, Barakhamba Road,
Connaught Place, Delhi-110001

Mobile:- +91-9873082769 
Website: www.caaga.co.in