Securities And Exchange Board of India (Substantial Acquisition of Shares And Takeovers) (Amendment) Regulations, 2001. - S.O. No.791(E) - SEBI/LE/34699/2001 - SEBI

SECURITIES AND EXCHANGE BOARD OF INDIA NOTIFICATION Mumbai, the 17 th August, 2001 S.O. 791(E).-- In exercise of the powers conferred by sub-section (1) of section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to amend the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. 1. These Regulations may be called the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2001. 2. They shall come into force on the date of their publication in the Official Gazette. 3. In the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as the Regulations )- (a) In Regulation 2, in sub-regulation (1), (i) after clause (c), the following clause shall be inserted, namely:- (cc) disinvestment means the sale by the Central Government, of its shares or voting rights and / or control, in a listed Public Sector Undertaking. (ii) after clause (i), the following clause shall be inserted, namely:- (ii) Public Sector Undertaking means a company in which the Central Government holds 50% or more of its equity capital or is in control of the company. (b) In Regulation 11, after sub-regulation (2), a new sub-regulation shall be inserted, namely:- 11(3) Notwithstanding anything contained in Regulations 10, 11 and 12, in case of disinvestment of a Public Sector Undertaking, an acquirer who together with persons acting in concert with him, has made a public announcement, shall not be required to make another public announcement at the subsequent stage of further acquisition of shares or voting rights or control of the Public Sector Undertaking provided:- (i) both the acquirer and the seller are the same at all the stages of acquisition, and (ii) disclosures regarding all the stages of acquisition, if any, are made in the letter of offer issued in terms of Regulation 18 and in the first public announcement. (c) In Regulation 14, in sub-regulation (1), a proviso shall be added, namely :- Provided that in case of disinvestment of a Public Sector Undertaking, the public announcement shall be made by the merchant banker not later than 4 working days of the acquirer executing the Share Purchase Agreement or Shareholders Agreement with the Central Government for the acquisition of shares or voting rights exceeding the percentage of shareholding referred to in Regulation 10 or Regulation 11 or the transfer of control over a target Public Sector Undertaking. (d) In Regulation 20, (i) in sub-regulation (2), after clause (d) the following Explanation shall be added ; namely :- Explanation : In case of disinvestment of a Public Sector Undertaking, the relevant date for the calculation of the average of the weekly high and low of the closing prices of the shares of the Public Sector Undertaking, as quoted on the stock exchange where its- shares are most frequently traded, shall be the date preceding the date when the Central Government (after receiving the cabinet approval) announces the name of the successful bidder. (ii) in sub-regulation (3), after sub-clause (i) to the Explanation, a new sub-clause shall be inserted, namely :- (ia) In case of disinvestment of a Public Sector Undertaking, the shares of such an undertaking shall be deemed to be infrequently traded, if on the stock exchange, the annualised trading turnover in the shares during the preceding six calendar months prior to the month, in which the Central Government, after receiving the cabinet approval, announces the name of the successful bidder, is less than two percent (by the number of shares) of the listed shares. For this purpose the weighted average number of shares listed during the six months period may be taken . (e) in Regulation 22, after sub-regulation (16), a proviso shall be added, namely:- Provided that in case of the acquisition of shares of a Public Sector Undertaking pursuant to a public announcement made under the Regulations, the provisions of sub-regulation (8) of Regulation 23 shall be applicable. (f) in Regulation 23, after sub-regulation (7), a new sub-regulation shall be inserted, namely :- (8) The obligations provided for in the proviso to clause (a) of sub-regulation (3) and sub-regulation (6) of this regulation, shall not be applicable where the agreement to sell shares of a Public Sector Undertaking contains a clause to the effect that in case of non-compliance of any of the provisions of the Regulations, the shares or the control of the Public Sector Undertaking shall revert back to the Central Government and the acquirers shall be liable to such penalty as may be imposed by the Central Government. (g) in Regulation 25, after sub-regulation (2), a new sub-clause shall be inserted, namely:- (2A) No public announcement for an offer or competitive bid shall be made after the Central Government has entered into a Share Purchase or Shareholders Agreement with the acquirer who has made the public announcement for acquisition of shares or voting rights or control of a Public Sector Undertaking. [F. No. SEBI/LE/34699/2001] D. R. MEHTA, Chairman Footnote :- (1) SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, the principal regulation, was published in the Gazette of India on February 20, 1997, vide SO No. 124(E). (2) Subsequently a Corrigendum was published in the Gazette of India Extraordinary on February 6, 1998, vide S.O. No 106(E). (3) It was subsequently amended by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 1998 which was published in the Gazette of India on October 28, 1998, vide S.O. No 930(E). (4) It was subsequently amended by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2000 which was published in the Gazette of India on December 30, 2000, vide S.O. No. 1178(E).