Sebi to consult CAs, merchant bankers on takeover valuations

By | January 20, 2015
To ensure fair treatment of minority investors during takeovers of listed companies, regulator Sebi has decided to seek help of chartered accountants and merchant bankers for an independent valuation of the price offered to small shareholders by new promoters. For the purpose, Sebi would empanel eligible Chartered Accountant firms to take up work relating to valuation of shares under its Takeover Regulations, that involves the entities buying a substantial stake in a listed company to make an open offer for minority shareholders as well.


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2. Companies citing capital control rules to skip paying pre-determined prices
After the attention the Tata-DoCoMo issue has garnered, Indian corporates are lining up to invoke a Reserve Bank of India restriction to avoid previously agreed prices with foreign partners to buy back or sell shares, especially in cases where the valuations have moved drastically, say lawyers. Deflecting the issue on authorities seems more honourable than breaching a contract for these companies. In many cases, these companies have tried to renegotiate the original terms with investors, but to no avail, lawyers say.


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