SEBI reconstitutes Takeover Panel

Capital markets regulator Sebi has reconstituted its Takeover Panel, which looks into the applications seeking exemption from the mandatory open offer that an acquirer needs to make to minority shareholders.

The panel, comprising independent experts, makes its recommendations to Sebi on such applications after which the regulator gives an opportunity to concerned parties before passing an order.

The newly notified Takeover Panel would be chaired by Justice N K Sodhi, the Former Chief Justice of the High Courts of Karnataka and Kerala and also the Former Presiding Officer of the Securities Appellate Tribunal. Sodhi had also chaired the Sebi panel that revisited two-decade old insider trading norms, which came into force earlier this year.

S Ravi, a renowned Chartered Accountant who has been on boards of various PSUs and is partner at Ravi Rajan and Company, has been appointed as a member on the new panel.

The other members of this Takeover Panel include Darius Khambata (former Advocate General, Maharashtra), M S Raghavan (Former Chairman and Managing Director of IDBI Bank) and Thomas Mathew T (Chairman of MCX Stock Exchange and former Chairman of Life Insurance Corporation of India).

Sebi had first constituted a four-member Takeover Panel in November 2007, under chairmanship of former Bank of Baroda Chairman K Kannan.

Separately, the regulator has also made a change in the Sebi Committee on Disclosures and Accounting Standards (SCODA), wherein it has appointed CA Pankaj Jain (member of accounting regulatory body) in place of S Santhanakrishnan.

Chaired by Tata Sons Director (Finance) Ishaat Hussain, this panel advises Sebi on issues related to the disclosure requirements by the companies for protecting the interests of the investors and ensure smooth implementation of accounting standards, statements, guidance notes and studies evolved by the Institute of Chartered Accountants of India (ICAI).

These panels have been re-constituted at a time when Sebi is looking to review some key norms, including its regulations governing mergers and acquisitions involving listed companies and to prescribe a new definition for 'control'.

The review is aimed at making the norms easier for the companies and safeguard the interest of minority investors.

Among other issues, Sebi is looking at prescribing a new definition for 'control' and review the provisions governing discovery of price to be offered by acquirers to the public shareholders, sources said.

Sebi had put in place a new Takeover Code in October 2011, wherein the major changes included increasing the open offer trigger for minority shareholders from 15 per cent to 25 per cent, while the size of the offer was also raised from 20 per cent to 26 per cent.

This Code replaced the takeover rules that were in force till that time since 1997. While a Sebi-appointed panel had suggested an open offer size of up to 100 per cent, the regulator decided to keep it at 26 per cent after public consultation to help the domestic acquirers, as they lack access to large bank funding for such deals.

The review at that time was done by a Takeover Regulations Advisory Committee, which was set up in September 2009 under the chairmanship of C Achutan and it had submitted its report to Sebi in July 2010.

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