The takeover guidelines proposed by the Achuthan panel calls for comprehensive modifications in the existing norms
Seeking to take wide ranging view point on board, the Finance Ministry is holding consultations with industry and stakeholders on Thursday before finalising the proposed changes in the Takeover Code on mergers and acquisitions.
The Takeover Regulations Advisory Committee, chaired by Chief Economic Advisor Kaushik Basu, would discuss the amendments in the code as proposed by the C. Achuthan headed SEBI panel, Finance Ministry officials said.
The meeting will be attended by the Federation of Indian Chambers of Commerce and Industry, the Confederation of Indian Industry and the Associated Chambers of Commerce and Industry of India besides some chartered accountants and members from the panel. Once the Finance Ministry clears the amendments, it is likely to be approved by the Securities and Exchange Board of India in its next board meeting for implementation.
The takeover guidelines proposed by the Achuthan panel in July last year calls for comprehensive modifications in the existing norms and if implemented would make corporate merger and acquisition deals costly. The proposed changes in the existing norms have generated widespread opinion, a Ministry official said. “Before taking a final view on the matter of the Takeover Code, it was felt that it will be appropriate to have an intensified discussions with all stakeholders for their views and observations,'' the official said.
Earlier, SEBI had sought comments from stakeholders on the Achuthan report. Most number of comments came on the issue of buyback and non-compete fee.
As per the proposed guidelines, an entity buying 25 per cent stake in a company will need to make an open offer to the rest of the shareholders.
Under the existing norms, the trigger point for making an open offer to shareholders was acquisition of 15 per cent equity in the target company through market operations or through a negotiated deal.