Forum Views - June 2024
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10
FORUM VIEWS - JUNE 2024
of shares and Persons or Shareholders acting in concert
for not less than three years.
b. Acquisition in the ordinary course of business by
Underwriter, Stockbroker, merchant banker, anyone
who acquires shares under regulation 44 of SEBI (ICDR)
Regulations, 2009 under the safety net scheme, a
registered market-maker of a stock exchange, a
scheduled commercial bank which acts as an escrow
agent for the parties and as discussed above, when
during an invocation of pledge by a scheduled
commercial bank or public financial institutions.
g. Increase in voting rights arising out of beyond the limit
pursuant to buy-back of shares provided such
shareholder reduces his shareholding such that his
voting rights fall to below the threshold referred to in
sub-regulation (1) of regulation 3 within ninety days
from the date.
h. Increase in the voting rights arising out of acquisition
pursuant to a rights issue, a buy back, a share swap
scheme and acquisition of shares in a target company
from a venture capital fund or a registered foreign
venture capital investor by promoters of the target
company pursuant to an agreement.
Apart from the general exemptions provided above, the
Regulations also empowers SEBI to grant exemption from
the requirements of making an open offer or grant a
relaxation from strict compliance with prescribed
provisions of the open offer process upon a specific
application made by the acquirer or the target company.
This exemption is granted by SEBI on a case to case basis.
For instance, in one case, SEBI granted an exemption from
the requirement of making an open-offer when the shares
were acquired by a family trust for streamlining family
succession. The exemption by SEBI was granted on the
grounds that that there would be no effective change in
exercise of voting power or in control/ management of the
target company since the said acquisition of shares was of
a private family trust and the beneficiaries of the acquisition
continued to be the family members.
Zerick Dastur is Proprietor of the Law Firm, practicing in the field of Court
litigation, Dispute Resolution, Arbitration, Securities law and Competition Law.
He is a triple Gold Medalist from Mumbai University having topped the Mumbai
University in Law. His practice covers diverse areas of Corporate, Commercial,
Securities law and Regulatory disputes. He is representing a number of clients in
the Port Sector, Infrastructure and Mining Sectors. He has represented clients in
domestic and international, commercial arbitration matters. He handles a
number of cases relating to securities law litigation and SEBI. He was a former
Partner at the Law Firm, J. Sagar Associates.
He has litigation experience before the Hon’ble Supreme Court, various State
High Courts Statutory Tribunals and Regulators. He has been involved in a
number of matters involving issues of Constitution Law. He has been involved in
landmark matters involving defence of Auditors and Corporate clients before
various Regulators/Civil/Criminal Courts and Tribunals in connection with
Corporate frauds. He has also advised various clients in matters involving
shareholder disputes and minority actions before the NCLT and CLB.
He also practices Securities Law and appears before the Securities Appellate
Tribunal and the SEBI. He has advised clients in connection with Competition
Law issues in everyday business operations including issues relating to anti-
competitive agreements and abuse of dominance by enterprises.
He writes for various newspapers and publications on issues relating to
Corporate law, Arbitration, Commercial and Competition Law. He regularly
writes on securities law for the publication run by the Bombay Stock Exchange
Brokers Forum. He is a regular speaker at events organised by Economic Times,
VC Circle, Indian Merchant Chambers, Consumer Resources, Corporate
Knowledge Foundation and the World Zoroastrian Chamber of Commerce.
He is a Member of the Law Committee of Indian Merchant Chambers and was
involved in the drafting of the Rules for the IMC International Arbitration Centre.
Views of the author are personal and do not constitute legal advice.
(Advocate Zerick Dastur and Advocate Khushil Shah)
The Regulations also empowers SEBI to
grant exemption from the
requirements of making an open offer
or grant a relaxation from strict
compliance with prescribed provisions
of the open offer process upon a
specific application made by the
acquirer or the target
company. This exemption is
granted by SEBI on a case to
case basis.
c. When the acquisition is made in various stages
pursuant to a disinvestment agreement where the
acquirer has made an open offer for acquiring shares at
earlier stages.
d. When the acquisition is made pursuant to a scheme
provided under Regulation 10(1)(d) of the Takeover
Code. For example, the scheme of revival under the Sick
Industrial Companies (Special Provisions) Act, 1985 or
the acquisition pursuant to the provisions of the
Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002.
e. When there is an increase in shareholding beyond the
threshold limits without the acquisition of control
pursuant to pursuant to the conversion of equity shares
with superior voting rights into ordinary equity shares.
f.
Any acquisition of shares or voting rights or control of
the target company pursuant to a preferential issue in
compliance with the SEBI (ICDR) Regulations, 2018.
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