REGULATORY UPDATE: NOTIFICATION OF SECURITIES AND EXCHANGE BOARD OF INDIA(SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) (AMENDMENT) REGULATIONS, 2017

The SEBI vide its notification dated 14 August 2017, has amended Regulation 10 (General Exemptions from making Open Offer) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2017. This regulation shall not be applicable in case of acquisition of shares as lender pursuant to conversion of debt as part of debt restructuring scheme or purchase from the lenders at the time of lenders selling their shareholding or enforcing change in ownership in favour of such person(s), pursuant to a debt restructuring scheme, if the following conditions are fulfilled:

  • While determining the purchase price for conversion of debt shall be as specified by the Reserve Bank of India.
  • the purchase price shall be certified by two independent qualified valuers, and for this purpose ‘valuer’ shall be a person who is registered under section 247 of the Companies Act, 2013 and the relevant Rules framed thereunder. Till the relevant Rules for registered valuer comes into force, valuer shall mean an independent merchant banker registered with the Board or an independent chartered accountant in practice having a minimum experience of ten years;
  • The securities allotted shall be a lock-in for three years from the date of purchase.
  • a special resolution has been passed by shareholders  of the issuer before the purchase
  • applicable provisions of the Companies Act, 2013 are complied with.

Source:http://www.sebi.gov.in/legal/regulations/aug-2017/securities-and-exchange-board-of-india-substantial-acquisition-of-shares-and-takeovers-amendment-regulations-2017_35634.html

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