Securities and Exchange Board of India (Sebi) has asked the listed as well as unlisted companies to appoint independent merchant bankers during the merger valuation to protect rights of smaller shareholders. The appointement of independent bankers would give a fairness opinion on the valuation done by valuers and reveal the valuations.
The current norm involves the bankers involved in the merger of listed and unlisted companies to submit a certificate to the stock exchanges, stating the fair valuation of the deal. Also the "Fairness opinion" of the merchant bankers shall be made available to the shareholders at the time of approving the resolution under Clause 24.
Clause 24 of SEBI involves both listed and unlisted companies which are getting merged to obtain a fairness opinion on valuation of shares from independent merchent bankers. In another step SEBI has modified the Clause 41 of Disclosures and Investor Protection (DIP) guidelines. This modification would reduce the time duration of rights issue to 43 days as against the earlier 109 days.
Some changes have also been made regarding submission and publication of financial results. A listed entity, in addition to submitting quarterly and year to date standalone financial results within one month of the end of the quarter, may also submit consolidated financial results to the stock exchange within two months from the end of the quarter. Also now the firms have the option of publishing only consolidated financial results. For other amendments, click here.