The Securities and Exchange Board of India (Sebi) on Wednesday proposed exemption from making an open offer for entities whose shareholding in a listed company increases due to forfeiture of shares. Currently, there is no provision for exemptions under the takeover regulations in case of increase in the voting rights of a shareholder due to the expiry of call notice period and forfeiture of partly paid-up shares. Under the new norms, Sebi has proposed "for providing general exemption from the open offer obligations in the cases of increase in voting rights as a result of the expiry of call notice period and the forfeiture of shares in line with general exemptions available with respect to rights issues, buybacks, etc".
The increase in the shareholding due to the expiry of call notice period and forfeiture of shares may be treated as a "passive acquisition".
Sebi has invited comments from the market till September 30.
