Sebi Sets Up Panel To Review Corporate Takeover Rules

The 20-member committee on review takeover regulations will be chaired by former Chief Justice of Punjab and Haryana High Court, Shiavax Jal Vazifdar

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By Teena Jose • Nov 30, 2022

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The Securities and Exchange Board of India (SEBI) has set up three separate committees to reform the capital markets and improve ease of doing business. All three committees will be widely represented by various stakeholders and cover the key areas such as foreign portfolio investors (FPIs), takeover code and the newly-introduced concept of social stock exchanges (SSEs). The 20-member committee on review takeover regulations will be chaired by former Chief Justice of Punjab and Haryana High Court, Shiavax Jal Vazifdar, as per reports.

The committee will advise on issues related to substantial acquisition of shares and takeovers. It will have representation from industry bodies CII, Ficci and AIBI, along with stock exchanges and law firms. "It will also review the extant provisions of takeover regulations in light of past judicial pronouncements and various informal guidance issued by Sebi till date," the regulator said in a statement.

The most notable intervention made by Sebi in recent times, in the takeover segment, was the Adani's acquisition offer for NDTV. In November 2022, Sebi approved Adani Group's open offer to buy an additional 26 per cent stake in broadcaster New Delhi Television Ltd, marking a crucial turning point in the takeover battle between Gautam Adani and NDTV. The previous proceedings' reports had stated that on November 27, 2020, the capital markets regulator had restrained NDTV promoters Prannoy Roy and Radhika Roy from dealing in securities directly or indirectly for two years for alleged insider trading.

The 16-member FPI Advisory Committee (FAC) will be chaired by Hasmukh Adhia, (former finance secretary). It will also include H R Khan (former deputy governor, RBI) and R Subramanian (executive director, RBI). The FAC will advise on issues pertaining to investments and operations of FPIs in the Indian financial markets. It will review investment avenues available for FPIs and advise on feasibility of new investment avenues, apart from giving measures to promote FPI participation in the bond market. It will also advocate measures for the simplification of FPI regulations and legal framework to enhance transparency, the reports further stated.

Lastly, the social stock exchange (SSEs) advisory committee will be headed by R Balasubramaniam, (chairman, Grassroots Research and Advocacy Movement) and will have 17 other members, including Amit Chandra, (chairman), Bain Capital and Jyotsna Sitling, (principal chief conservator, forests, Government of India). It will advise on the matters to be taken up for changes in the legal framework for simplification and transparency in systems governing social enterprises, and on the regulation of intermediaries for ensuring investor protection with respect to SSEs.

Teena Jose

News Desk Reporter with Entrepreneur India

Teena is a post graduate in financial journalism. She has an avid interest in content creation, digital media and fashion.

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