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Update on Amendments to the Takeover Code

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Rohit Das, Souvik Bhadra, Mrunmayee Malabika, Krushi Burfiwala

The Securities and Exchange Board of India (“SEBI”) introduced the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (“Takeover Code, 1997”) to regulate the acquisition of shares and voting rights in public listed companies in India. The Securities and Exchange Board of India (“SEBI”) had been considering reviewing and amending the Takeover Code, 1997 for quite some time now.

A Takeover Regulations Advisory Committee was constituted under the chairmanship of Mr. C. Achuthan (“Achuthan Committee”) in September, 2009 to review the Takeover Code, 1997 and give suggestions. The Achuthan Committee provided its suggestions in its report, which was submitted to the SEBI in July, 2010. After taking into account the suggestions of the Achuthan Committee and feedback from the interest groups and general public on such suggestions, the SEBI finally notified the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Code, 2011”) on 23 September 2011. The Takeover Code, 2011 will be effective from 22 October 2011. SEBI has, however, clarified that any open offer, for which a public announcement has already been made, would be governed by the Takeover Code, 1997.

The Takeover Code, 2011 adheres to the framework and principles of the Takeover Code, 1997 but the changes that it brings about are significant. This edition of the I-Witness Update provides an overview of the Takeover Code, 2011 and discusses some of the most important amendments that have been brought about.

The PXV Update on the key changes to the Takeover Code is here: PXV – I-Witness – Takeover Code, 2011 – 19 October 2011

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