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INDIA BUSINESS WORLD - 1st FEBRUARY - TO - 15th FEBRUARY - 2009
SEBI TO AMEND TAKEOVER REGULATIONS
CAPITAL market regulator Sebi will amend the takeover regulations to help arrive at a fair open offer price in special cases, such as the one faced by the beleaguered Satyam Computer Services.
Sebi chairman CB Bhave announced this at a press conference after a board meeting in Mumbai. Mr Bhave did not mention any time frame, but said the issue would be addressed at the "earliest".
The Satyam board had requested Sebi for relaxation of the open offer pricing norm, as the price prior to January 7—the day on which Satyam founder B Ramalinga Raju admitted to a Rs 7,800-crore accounting fraud—was not relevant in view of the disclosures.
"The board recognised the special circumstances that have arisen in the affairs of the company and concluded that the issue needs to be dealt with in the general context rather than for a specific case. We need to have provisions in our regulations to deal with such cases," Mr Bhave said.
Under the current rule, an investor holding 15% in a company has to make an open offer for an additional 20% at a price not less than the average price in the previous six months. Satyam shares, which were quoting at around Rs 330 in mid-December, before the announcement of the abortive investment in Maytas Infrastructure, fell to Rs 180 by the first week of January.
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