Sebi yet to take final view on takeover code

Market regulator the Securities and Exchange Board of India (Sebi) is yet to take a final decision on the new company takeover code which proposes to raise the trigger limit for open offer to 25% from 15% at present, a senior Sebi official said today.

"Sebi has not taken final decision on takeover regulations. Sebi will take a considered view only after consultations with all the stakeholders involved," Sebi General Manager Neelam Bhardwaj said while addressing a PHD Chamber event here.

She said the new regulatory framework would balance the interests of all the stakeholders.

A Sebi committee on takeover code, headed by C Achuthan, had suggested that the acquiring company should make 100% open offer, thus giving the exit option to all the shareholders of the target company.

Current norms mandate acquirer to make an open offer of 20% in the target company. The recommendation of 100% open offer was opposed by the industry as it would have made acquisition a very expensive proposition.

The recommendations of the committee which submitted its report in July last year also says an entity buying 25% stake in a company should make an open offer to the rest of the shareholders.

Bhardwaj further said that the market regulator is working on providing an easy exit option to inactive companies listed on the bourses. Only 10% of the companies listed on the stock exchanges are actively traded.

"We should identify small companies with up to 300 shareholders and provide them with easy exit option. Many companies are not actively traded. Penalty is not the only option," she added.