SEBI

Disclosures required under SEBI (Substantial Acquisition of Shares and Takeovers) Regulation, 2011

There are certain disclosures required under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. In this article, we shall look at all disclosures or intimations, or publications that is needed under the aforementioned regulations. But before that, let’s have an overview of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

What is meant by the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011?

Mergers and acquisition are one of the prominent ways of restructuring a company. In case the majority shareholders of a company agree unanimously to merge with another entity, it can impact the company and the shareholders, which could be well or maybe not.

Therefore as the regulator of capitals market, SEBI is required to ensure that the process is fair and that the shareholders interest is also protected. It is the reason that led to the introduction of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. It regulates the direct as well as indirect acquisition of shares and voting rights or control.

Various disclosures or intimations or publications needed under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

• Pre-intimation under Regulation 10 for availment of general exemptions

With regards to acquisitions under Clause (a) of sub-regulation (1) and clauses (e) and (f) of sub-regulation (4), the acquirer must intimate the stock exchanges where the shares of target company is listed, the details of proposed acquisition in such form as specified, at least 4 working days before the proposed acquisition and such stock exchange^[1] should further disseminate such information to the public.

• Post intimation under regulation 10 by availing general exemptions

With respect to any acquisition made in relation to exemption provided under regulation 10, the acquirer should file a report with stock exchanges where the target company shares are listed, in such form as specified not later than 4 working days from the acquisition and the stock exchange would forthwith disseminate such information to the public.

• Public announcement publication under Regulation 14

A public announcement will be sent to all stock exchanges where the shares of the target company is listed, and the stock exchange would disseminate such information to the public.

The copy of the public announcement will be forwarded to the board and also to the target company at its registered office in one working day of the date of the public announcement.

Publication of detailed public statement in the newspapers, a copy shall be sent to all stock exchanges where shares of the target company are listed.

• Disclosure during the offer period

The acquirer, during the offer period, will disclose every acquisition made by the acquirer or persons acting in with him of any shares of the target company in such manner as may be specified to each stock exchanges where the shares of target company are listed and to target company at its registered office within 24 hours of the acquisition and the stock exchanges shall disseminate such information to the public.

• Announcement of the withdrawal of the open offer

In case of withdrawal of the open offer, the acquirer will, through the manager to the open offer, within 2 working days do the following:

1. Make an announcement in similar newspapers where the public announcement was published, providing the reasons for such withdrawal of the open offer;
2. Simultaneously with the announcement, inform the board in writing and to all stock exchanges and to the target company at its registered office.

• Disclosure of acquisition and disposal (Regulation 29)

Regulation 29(1) – acquirer with persons acting in concert acquires which taken together with the shares or voting rights, if any, already held by him and persons acting in concert, aggregating 5 percent or more in aggregate of the shares or voting rights of target company.

The disclosure has to be intimated by the acquirer/persons acting in concert to stock exchanges wherever shares are listed and to target company at its registered office within 2 working days of the receipt of the information of allotment of shares or disposal or acquisition of shares or the voting rights.   

Regulation 29 (2) – Any acquirer, who with person acting in concert with him holds shares or voting rights entitling them to 5 percent or more shares or voting rights in a target company should disclose the number of shares or the voting rights held and change in shareholding or voting rights, even if it causes shareholding to fall below 5 percent, if there is change in such holdings from the last disclosure made under sub regulation (1) or under this regulation and that such change exceeds 2 percent of the total shareholding or voting rights in the company.

The disclosure has to be intimated by the acquirer/persons acting in concertto stock exchanges wherever shares are listed and to target company at its registered officewithin 2 working days of the receipt of the information of allotment of shares or disposal or acquisition of shares or the voting rights.

• Continual disclosures

PARTICULARS	DISCLOSURE TO BE INTIMATED BY AND TO	TIME LIMIT
Every person with persons acting in concert holds shares or voting rights aggregating to 25 percent or more of voting rights in a target company	Every person with persons acting in concert as on March 31 of every year to stock exchanges wherever shares are listed and to target company at its registered office.	Within 7 working days from end of each financial year.
The promoter with persons acting in concert holding shares or voting rights in a target company will disclose their aggregate shareholding	Promoter with persons acting in concert to stock exchanges wherever shares are listed and to target company at its registered office.	Within 7 working days from end of each financial year.

Conclusion

The aforementioned disclosures, intimations, or publications are required under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

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