The imminent introduction of India’s new takeover code presents an opportunity for regulatory arbitrage
The acquisition of shares of a listed company in India is currently governed by the Securities and Exchange Board of India (Substantial Acquisition of Shares & Takeovers) Regulations, 1997. In September 2009, the Securities and Exchange Board of India (SEBI) set up the Takeover Regulations Advisory Committee (TRAC), which was given the mandate of realigning the regulations so as to “catch up” with developments and ensure they reflect globally accepted best practices.
The TRAC, in its report submitted to SEBI in July 2010, recommended a comprehensive overhaul of the existing framework and has put together a set of draft regulations.
With a change of guard at SEBI (CB Bhave stood down as SEBI’s chairman on 17 February and has been replaced by UK Sinha) and a regulatory change in the offing, there is a rare opportunity for companies to take advantage of a period of regulatory arbitrage.
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Cyril Shroff is a managing partner of Amarchand & Mangaldas & Suresh A Shroff & Co. Amita Choudary is a principal associate.
