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Sebi brings preferential allotments under takeover code

The Securities and Exchange Board of India has removed automatic exemption granted to preferential share allotments and brought them under the purview of the new takeover code while tightening the indirect acquisition norms.

As per the takeover code notified by the government, the capital market regulator has removed the automatic exemption in respect of acquisition through preferential allotment, although the Bhagwati panel, set up by Sebi to review takeover norms, had recommended that exemption be retained

After considering the Committee recommendations and comments received from various quarters on the code, the Sebi board approved certain amendments, including relaxation for divestment by state PSUs and additional disclosure requirements.

Other amendments included change of management control (of a company) through special resolution instead of ordinary resolution, and dispensation with the requirement of advance submission of a copy of draft public announcement to Sebi as well as the stock exchanges and the target company, the release said.

UNI

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