Abstract

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. In July, 2020, SEBI has introduced third amendment to the Code with minor amendments. 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. The first and second section of the article attempts to study the various theories of takeovers and in that background highlight the evolution of the takeover regulations in India. It also commemorates a brief overview of the U.K. and U.S.A takeover regulations for a coherent understanding of the regulations in India. The last section of the paper is a summary of the rationale behind making key changes in the 1997 Takeover Code in India. Hence, the paper is relevant in the present for scholars, advocates and judges.

Keywords