Seeking to define ‘control’ in case of merger and acquisitions involving listed companies, Sebi on Monday proposed a 25 per cent voting right threshold or the right to appoint a majority of directors
Seeking to define ‘control’ in case of merger and acquisitions involving listed companies, Sebi on Monday proposed a 25 per cent voting right threshold or the right to appoint a majority of directors as determining factors to identify the controlling entity.
Launching a public consultation process, the regulator said the final decision on putting in place ‘bright-line tests for acquisition of control’ under takeover regulations would be taken after looking into views of all stakeholders.
Sebi’s board had decided to initiate a consultation process at its meeting on Saturday, which comes against the backdrop of ambiguity over control in some listed firms. Comments have been invited till April 14, Sebi said, while adding it is open to suggestions beyond the measures proposed in the consultation paper that broadly lists two options — adopting a numerical threshold of 25 per cent voting rights, or putting in place a framework for protective rights such as veto powers.
