Interactive Inter collegiate seminar on ‘How open is Open Offer?’ – the new takeover code being introduced by the Securities and Exchange Board of India (SEBI) regarding take over code of companies led by Mr.C.J.George, Managing Director, Geojit BNP Paribas Financial Services Ltd. was the chief guest on 07-08-2010.
Marthoma College of Management and Technology (MCMAT) conducted an interactive seminar on SEBI’s new takeover code – HOW OPEN IS OPEN OFFER? on August 7, 2010 at 2 pm. The seminar was led by an eminent and resourceful person, Mr. C. J. George, Chairman and Managing Director of Geojit BNP Paribas. He highly appreciated the students and management for being so alert to the changes that is happening to the world outside and also for creating a platform to discuss on it.
Under the existing rules, an acquire launches a mandatory 20% open offer for the minority shareholders once he crosses the 15% threshold limit. A SEBI panel proposed that a mandatory open offer to raise stakes to 100% should be triggered once an acquirer buys at least 25% in another listed firm.
According to Shri. C. J. George minority shareholders will now be able to exercise their full rights to exit a company in case of a management change. The old rules provide them restricted opportunity to get out of a company.
Shri. C. J. George opines that there are some downsides in the proposal compared to the existing takeover regulations, just like there are upsides to it.
Under the new norms, a predator can mop up to a shade below 25% stake in a listed company without triggering an open offer. With this stake, the predator can block a special resolution when the company seeks the shareholder’s permission.
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