Role of Takeover Regulations in Protecting Minority Interests
Table of Contents
INTRODUCTION………………………………………………………………………………. 3
NEED FOR REGULATIONS IN CORPORATE CONTROL MARKET AND THE RELEVANCE OF CORPORATE GOVERNANCE…………………………………………… 4
DEVELOPMENT OF THE TAKEOVER REGULATIONS IN INDIA……………………….. 5
OBJECTIVES OF THE TAKEOVER REGULATIONS………………………………………. 7
TAKEOVER CODE…………………………………………………………………………….. 7
SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS………………………… 8
PROTECTION OF MINORITY INTEREST………………………………………………….. 10
CONCLUSION………………………………………………………………………………… 15
BIBLIOGRAPHY……………………………………………………………………………… 17
INTRODUCTION
Takeover of companies is a well-accepted and established strategy for corporate growth. International experience of takeovers and mergers and amalgamations has been varied. Nonetheless, one of its important lessons is that, its appeal as an instrument of corporate growth has usually been the result of an admixture of corporate ethos of a country, shareholding pattern of companies, existence of cross holdings in companies, cultural conditions and the regulatory environment.
In India, however, "the market" for takeovers has not yet become significantly active, though following economic reforms, there is now a discernible trend among promoters and established corporate groups towards consolidation of market share, and diversification into new areas, albeit in a limited way through acquisition of companies, but in a more pronounced manner through mergers and amalgamations. The latter course is outside the purview of SEBI and constitutes a subject matter of the Companies Act, 1956, and the courts of law, and there are well laid down procedures for valuation of shares and protection of the rights of investors.
In common parlance, a takeover bid is generally understood to imply the acquisition of shares carrying voting rights in a company in a direct or indirect manner with a view to gaining control over the management of the company. Generally speaking, there cannot be a
INTRODUCTION………………………………………………………………………………. 3
NEED FOR REGULATIONS IN CORPORATE CONTROL MARKET AND THE RELEVANCE OF CORPORATE GOVERNANCE…………………………………………… 4
DEVELOPMENT OF THE TAKEOVER REGULATIONS IN INDIA……………………….. 5
OBJECTIVES OF THE TAKEOVER REGULATIONS………………………………………. 7
TAKEOVER CODE…………………………………………………………………………….. 7
SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS………………………… 8
PROTECTION OF MINORITY INTEREST………………………………………………….. 10
CONCLUSION………………………………………………………………………………… 15
BIBLIOGRAPHY……………………………………………………………………………… 17
INTRODUCTION
Takeover of companies is a well-accepted and established strategy for corporate growth. International experience of takeovers and mergers and amalgamations has been varied. Nonetheless, one of its important lessons is that, its appeal as an instrument of corporate growth has usually been the result of an admixture of corporate ethos of a country, shareholding pattern of companies, existence of cross holdings in companies, cultural conditions and the regulatory environment.
In India, however, "the market" for takeovers has not yet become significantly active, though following economic reforms, there is now a discernible trend among promoters and established corporate groups towards consolidation of market share, and diversification into new areas, albeit in a limited way through acquisition of companies, but in a more pronounced manner through mergers and amalgamations. The latter course is outside the purview of SEBI and constitutes a subject matter of the Companies Act, 1956, and the courts of law, and there are well laid down procedures for valuation of shares and protection of the rights of investors.
In common parlance, a takeover bid is generally understood to imply the acquisition of shares carrying voting rights in a company in a direct or indirect manner with a view to gaining control over the management of the company. Generally speaking, there cannot be a
Bibliography: • http://indiacorplaw.blogspot.in/2012/02/minority-shareholder-protection-in-m.html • www.ashurst.com/doc.aspx?id_Content=3748 • www.ibanet.org/Document/Default.aspx?DocumentUid...98AA...