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Disclosure under takeover code

manpreet.kaur (Student) (184 Points)

28 September 2012

A PVT LIMITED COMPANY BOUGHT SHARES OF A PUBLIC LIMITED COMPANY FOR THE FIRST TIME.. WHICH LEAD TO ITS SHAREHOLDING UPTO 0.11% .... DOES IT REQUIRE ANY DISCLOSURE BY THAT PVT COMPANY UNDER NEW SEBI TAKEOVER CODE.... ????

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(Guest)

Manpreet, the SEBI Takeover Code is only applicable when any Public Listed Companies of India is a target company. So, this Private Limited Company is out of it's ambit.

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manpreet.kaur (Student) (184 Points)
Replied 29 September 2012

but veeral as far as i m concerned..target company needs to be a public listed company.. n not the acquiring company...correct me if m wrong.. n plz tell that relevant point which says that...

manpreet.kaur (Student) (184 Points)
Replied 29 September 2012

but veeral as far as i m concerned.. target company is required to be a public listed company n not the aquirer company.. correct me if i m wrong n plz tell the relevant point which says that...

Smriti Dhawan (Company Secretary ) (347 Points)
Replied 29 September 2012

Dear Manpreet you are right, acquirer can be any person or any body corporate who is acquiring Shares of Listed Company, As mentioned by you Pvt. Company is purchasing 0.11% in listed Company, this does not require any disclosure

As per Takeover Code Acquisition of 5% or more shares or voting rights is required to give disclosure under Clause 29(1) of Takeover Code.

As per Clause 29(2) of Takeover Code Acquisition or disposal of 2% or more shares or voting rights by the acquirer already holding 5% or more shares or voting rights.

No disclosure is required by Private Company in your case

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 29 September 2012

Manpreet ji,

Takeove code is applicable only to the Listed Companies.

Definitions under New Takeover Code:

Target Company: means a company and includes a body corporate or corporation established under a central legislation, state legislation or Provincial legislation for the time being in force, whose shares are listed on a stock exchange.

Acquirer : means any person who, directly or indirectly, acquires or agrees to acquire whether by himself, or through, or with persons acting in concert with him, shares or voting rights in, or control over a target company;

In case of any acquisition where any of the company, whether target company or acquirer company, is listed, Takeover code comes in the picture and the companies have to disclose accordingly.

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Smriti Dhawan (Company Secretary ) (347 Points)
Replied 29 September 2012

Originally posted by : CS Ankur Srivastava
	Manpreet ji, Takeove code is applicable only to the Listed Companies. Definitions under New Takeover Code: Target Company: means a company and includes a body corporate or corporation established under a central legislation, state legislation or Provincial legislation for the time being in force, whose shares are listed on a stock exchange. Acquirer : means any person who, directly or indirectly, acquires or agrees to acquire whether by himself, or through, or with persons acting in concert with him, shares or voting rights in, or control over a target company; In case of any acquisition where any of the company, whether target company or acquirer company, is listed, Takeover code comes in the picture and the companies have to disclose accordingly.

Mr. Ankur as per my interpretation , takeover code will only be applicale where target Company is Listed Company.

If Shares of Private Company is acquired by Listed Company how will Takeover code be applicale as defined Target Company has to be listed Company.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 29 September 2012

Ms. Smriti,

Please check, in case a Listed Company acquires any unlisted company, it has to issue shares to the owners / shareholders of that private company, in this case whether this Listed Company not requires to disclose the transaction.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 29 September 2012

Ms. Smriti,

Ankur S Kumar (CA) (204 Points)
Replied 29 September 2012

Manpreet, it may seem that there are three different versions in the replies of our expert members but they all are same. What Veeralji said was elaborated by Smritiji and it was further substantiated by Ankurji.

The variations arised because the query did not mention whether the target company is listed or not. I kindly request you to give all the details about the company, if you ask any query next time. It will only help the experts to answer your query most accurately.

I thank all the three experts and you for discussing this topic.

Regards,

A. Kumar

Tanveer Md Masood (Indispensable) (361 Points)
Replied 29 September 2012

thanks all experts and finace professionals...detailed and lucid ex[lanation by Mr.Srivastav- what i made out from the above discussion is that- if a listed company whether its a private or public ltd. which acquire shares in another company which is called the target company ( listed), it needs to disclose the same to the shareholders provided the percentage of acquisition is 5%.

please correct me if iam wrog in my interpretation.

regards..

Tanveer Md Masood

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Ankur S Kumar (CA) (204 Points)
Replied 29 September 2012

Tanveer, a private company can never be a listed company, unless it lists itself in future. But if a private company acquires shares in a listed public company above the stipulated limit, it will have to make a disclosure.

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Tanveer Md Masood (Indispensable) (361 Points)
Replied 29 September 2012

MR.KUMAR..

YOU MEAN TO SAY A PRIVATE COMPANY CAN ENLIST ITS SHARES IN A STOCK EXCHANGE.

Ankur S Kumar (CA) (204 Points)
Replied 29 September 2012

Tanveer, if a private company wants to become a listed company, it will definitely have to convert itself into a public company, before listing itself. But the matter here is this :

"If a private company acquires shares in a listed company above the stipulated limit, it will have to make the necessary disclosures as per the takeover code."

Ankur S Kumar (CA) (204 Points)
Replied 29 September 2012

What I am trying to convey is :

An acquirer need not be listed on Stock Exchange. Thus, even a private company can be an acquirer and will need to make a disclosure if it acquires shares in a listed company above a stipulated limit.