TaxTMI 
TaxTMI 
SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1994
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....ficer" means any officer of the Board, or any other person, having experience in dealing with the problems relating to the securities market, and such person is authorized by the Board under Chapter V of these regulations; (d) "person acting in concert" comprises persons who, pursuant to an agreement or understanding acquires or agrees to acquire shares in a company for a common objective or purpose of substantial acquisition of shares and includes: i. a company, its holding company, or subsidiaries of such companies or companies under the same management either individually or all with each other; ii. a company with any of its directors, or any person entrusted with the management of the funds of the company; iii. directors of companies, referred to in clause (i) and his associates; and iv. mutual fund, financial institution, merchant banker, portfolio manager and any investment company in which any person has an interest as director, fund manager, trustee, or as a shareholder having not less than 2% of the paid-up capital of that company. Explanation - For the purposes of this clause "associate" means: - A. any relative of that person within the meaning of section 6 o....
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....e management, may pass an order of exemption from the provisions of Chapter III after recording the reasons in writing for grant of such exemption. CHAPTER II DISCLOSURES OF SHAREHOLDING 5) Transitional provision. - (1) Any person, who holds more than five per cent shares in any company, shall within two months of notification of these regulations disclose his aggregate shareholding in that company, a) to all the stock exchange on which the shares of the said company are listed, and b) to the aforesaid company. (2) Every company whose shares are held by the persons referred to in sub-regulation (1) shall disclose to the stock exchange within two months from the date of notification of these regulations the aggregate number of shareholdings of each of the acquirer referred above. 6) Acquisition of 5% and more shares of a company. - (1) Any acquirer, who holds five per cent or less than five per cent shares in a company and acquires more than five per cent shares: - a) in pursuance of a public issue, or b) by one or more transactions, or c) in any other manner not covered by (a) and (b) above, shall disclose the aggregate of his shareholding in that company to the company ....
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.... more than ten per cent of the voting rights together with voting rights on shares already held by him, then, such person shall make a public announcement referred to in sub-regulation (1) at the time immediately before his entitlement to obtain voting rights on such securities. 4) Nothing in sub-regulation (2) shall apply to any person, who on the date of coming into force of these regulations holds shares carrying more than ten per cent of the voting rights in the capital of a company, if he has already complied with the provisions of clause 40A and clause 40B of the listing agreement of any stock exchange. 10) Acquisition of 10% or more of the shares of any company through open market purchases. - 1) An acquirer, who holds shares carrying ten per cent or less of voting rights in the capital of the company shall not acquire any further shares in the company from the open market which when taken together with his existing shareholdings, would carry more than ten per cent of the voting rights, unless such acquirer makes a public announcement of intention to acquire shares in the open market in accordance with these regulations. 2) An acquirer who on the date of commencement of ....
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.... would be posted to the shareholder and the manner and date by which the acceptance or otherwise of offer should be communicated; vii. The time and manner of payment of consideration for acquisition of shares; viii. All conditions subject to which the offer is made including the following conditions, namely: - a) the total number of shares to be acquired from the public, subject to a minimum as specified in regulation 21; b) the statutory approvals under the Companies Act, 1956 (1 of 1956), Monopolies Restrictive Trade Practices Act, 1969 (54 of 1969) and Foreign Exchange Regulation Act, 1973 (46 of 1973) required to be obtained for the purpose of acquiring the shares; and required to be obtained for the purpose of acquiring the shares; and c) approvals to be obtained from shareholders of the company of which the shares are being acquired; ix. Such other information in the investors interest having a bearing on the substantial acquisition of shares. 16) Brochures, advertising material, etc. - (1) The public announcement of offer or any other advertisement, circular, brochure or publicity material issued in relation to the acquisition of shares shall contain information es....
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.... the acquirer in the open market or the average of the weekly high and low of the closing prices of the shares as quoted on the stock exchange during the last six months preceding the date of announcement, whichever is higher, provided there has been a market for such shares during that period in that stock exchange; c) Where there has been no continuous market in the stock exchange for the share to be acquired, such average shall be calculated on the basis of weighted average prices quoted in at least one other stock exchange to the determined on the basis of the daily trading volume of such shares in that exchange or in any other reasonable manner with the prior approval of the Board; d) In case where the shares of the company are offered in lieu of cash payment, the value of such shares shall be determined in the same manner as mentioned in clauses (a) and (b) as the case may be. 20) General obligations. - (1) The announcement of public offer to acquire shares shall be made only when the acquirer has every reason to believe that he shall be able to implement the offer. 2) Within fourteen days of the public announcement of offer, the acquirer must also submit a letter of offe....
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.... which these shares are listed, or the entire holding if it is less than the marketable lot. 2) The public offer shall be made to the remaining shareholders of the company, to acquire from them an aggregate minimum of 20 per cent of the total shares of that company. 3) Where an acquirer holds more than ten per cent shares at the time of commencement of these regulations and was not required to comply with the provisions of clause 40A and clause 40B of the Listing Agreement, the public offer referred to in sub-regulation (2) shall be to acquire a minimum of such percentage as would increase his shareholding to atleast thirty per cent of the total shares of that company. 4) The offer referred to above shall not result in the public shareholding being reduced to less than 20 per cent of the voting capital of the company. 5) Where a person seeking to make acquisition of shares by reason of holding securities, which may carry voting rights at a later point of time, the percentage referred to in sub-regulation (2) and (3), shall be computed with reference to voting capital of the company including the securities which would carry voting rights. 6) Where number of shares offered for ....
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....lished, indicating reasons for withdrawal of the offer. 5) Where an offer is withdrawn under sub regulation (1) the acquirer shall not make any offer for acquisition of shares in the same company for a period of 6 months from the date, the offer is withdrawn. CHAPTER IV Bail out takeovers 26) Bail out takeovers. - (1) The provisions of the Chapter shall apply to a substantial acquisition of shares to financially weak company not being a stick industrial company, in pursuance to a scheme of rehabilitation approved by a public financial institution or a scheduled bank; (hereinafter referred to as lead institution). 2) The lead institution shall be responsible for ensuring compliance with the provisions of this Chapter. 3) The lead institution shall appraise the financially weak company taking into account the financial viability, and assess the requirement of funds for revival and draw up the rehabilitation package on the principle of protection of interests of minority shareholders, good management, effective revival and transparency. 4) The rehabilitation scheme shall also specifically provide the details of any change in management. 5) The scheme may provide for acquisitio....
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....on under regulation 27, shall on receipt of a communication in this behalf from the lead institution make a formal offer to acquire the shares from the promoters or persons in charge of the affairs of the management of the financially weak company, financial institutions and also other shareholders at a price determined by mutual negotiation between the person acquiring shares and the lead institution. Explanation - Nothing in this regulation shall prohibit the lead institution offering the shareholdings held by it to financially weak company as part of the scheme of rehabilitation. 30) Person acquiring shares to make public announcement in certain cases. - (1) Where an offer is made to the shareholders other than the persons in charge of the management of the affairs of the financially weak company, the person acquiring shares shall make a public announcement of his intention for acquisition of shares. 2) Such public announcement shall contain relevant details about the offer including the information about identity and background of the person acquiring shares, offer price, the plan for revival of the unit and the period for which the offer shall be kept open. 3) The terms of....
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....laints received from investor, intermediaries or any other person on any matter having a bearing on the allegations of substantial acquisition of shares and take-overs; and b) to investigate suo-moto upon its own knowledge or information, in the interest of securities business or investors interests, for any breach of the regulations. 34) Procedure for investigation. - (1) Before undertaking any investigation under regulation 33 the Board shall give a reasonable notice to the person concerned for that purpose. (2) Notwithstanding anything contained in sub-regulation (1), where the Board is satisfied that in the interest of the investors or in public interest no such notice should be given, it may be an order in writing direct that the investigation be taken up without such notice. (3) On being empowered by the Board, the investigating authority shall undertake the investigation and the person against whom an investigation is being carried out shall be bound to discharge his obligations as provided under regulation 35. 35) Obligations of investigation by the Board. - (1) It shall be the duty of every person who is being investigated (hereinafter referred to as the "person conce....