AI Overview...
Acquisition of Shares
Main Points and Insights
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Regulatory Framework: The acquisition of shares in India is primarily governed by the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and 2011. These regulations specify thresholds, disclosure requirements, and procedures for acquiring significant shareholdings A. R. Dahiya VS SEBI - Supreme Court, Daiichi Sankyo Company Ltd. VS Jayaram Chigurupati - Supreme Court, Digvijay Laxhamsinh Gaekwad (Danny Gaekwad) VS Sapna Govind Rao - Supreme Court.
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Threshold for Substantial Acquisition: Acquisition of 15% or more of a company's shares or voting rights triggers mandatory disclosures and possibly a public offer. Acquirers must notify SEBI and the target company upon crossing this threshold A. R. Dahiya VS SEBI - Supreme Court, K. Sreenivasa Rao VS Regional Director, Securities and Exchange Board of India - Andhra Pradesh.
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Creeping Acquisition: Acquirers can increase their stake gradually (creeping acquisition), but they must adhere to limits (e.g., 5% per year) and disclosure obligations. Breaching these limits requires compliance with specific regulations, including making public announcements Securities & Exchange Board of India VS Akshya Infrastructure Pvt. Ltd. - Supreme Court, Kosha Investments Ltd. VS Securities & Exchange Board of India - Supreme Court.
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Joint Acquisition and Common Objective: When multiple persons acquire shares together with a common purpose of gaining control, they are considered a group. Such collective acquisitions are subject to regulations, and the purpose is to control the target company Daiichi Sankyo Company Ltd. VS Jayaram Chigurupati - Supreme Court, K. K. Modi S/o late Gujarmal Modi VS Securities Appellate Tribunal & others - Bombay.
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Public Offer and Control: The purpose of making a public offer is to allow existing shareholders to sell their shares to the acquirer, enabling the acquirer to gain control. The regulations emphasize transparency and protecting minority shareholders Digvijay Laxhamsinh Gaekwad (Danny Gaekwad) VS Sapna Govind Rao - Supreme Court.
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Legal and Regulatory Penalties: Failure to disclose acquisitions or breach of limits can lead to penalties, including interest payments and orders to restore shareholdings. SEBI has the authority to take action against non-compliance Clariant International Ltd. VS Securities and Exchange Board of India - Dishonour Of Cheque.
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Control and Acquisition Types: Acquisitions can be friendly or hostile, with the objective of gaining control over the target company. Control is typically achieved through acquiring a majority stake, but even lesser stakes can confer influence depending on the context PRAMOD JAIN VS SECURITIES AND EXCHANGE BOARD OF INDIA - Supreme Court.
Analysis and Conclusion
The acquisition of shares in India is tightly regulated to ensure transparency, protect shareholders, and prevent market manipulation. Acquirers must adhere to specific thresholds (notably 15%) and disclosure obligations, including public announcements and compliance with creeping acquisition limits. Collective acquisitions with a common purpose are also regulated to prevent undue control. Non-compliance can result in penalties, including interest on delayed disclosures and orders to restore shareholdings. Overall, the regulatory framework aims to balance the interests of acquirers, target companies, and minority shareholders, facilitating fair and transparent market practices.
References: - A. R. Dahiya VS SEBI - Supreme Court - Daiichi Sankyo Company Ltd. VS Jayaram Chigurupati - Supreme Court - Digvijay Laxhamsinh Gaekwad (Danny Gaekwad) VS Sapna Govind Rao - Supreme Court - Clariant International Ltd. VS Securities and Exchange Board of India - Dishonour Of Cheque - K. Sreenivasa Rao VS Regional Director, Securities and Exchange Board of India - Andhra Pradesh - PRAMOD JAIN VS SECURITIES AND EXCHANGE BOARD OF INDIA - Supreme Court - Securities & Exchange Board of India VS Akshya Infrastructure Pvt. Ltd. - Supreme Court - Kosha Investments Ltd. VS Securities & Exchange Board of India - Supreme Court - K. K. Modi S/o late Gujarmal Modi VS Securities Appellate Tribunal & others - Bombay
Search Results for "Acquisition of Shares"
2015 8 Supreme 619 • India - Supreme Court
VIKRAMAJIT SEN, SHIVA KIRTI SINGH
Acquisition of Shares and Takeovers) Regulations, 2011 – Regulation 2(1)(a) – Appellant required to disclose such acquisition in ... (a) SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 – Regulations 3, 10, 11, 12, 16 and 20 – Buyback of ... (Para 13) ... (b) SEBI (Substantial Acquisition of Shares and Takeovers ... Acquisition of 15% or more of the shares or voting rights of any company. ... Since this #HL_....
2010 5 Supreme 482 • India - Supreme Court
SWATANTER KUMAR, AFTAB ALAM
Two or more persons must join together with the shared common objective and purpose of substantial acquisition of shares etc. of ... (a) Securities And Exchange Board of India (Substantial Acquisition of Shares And Takeover) Regulations, 1997 – Regulation 2(e)(2 ... for direct takeover – (b) price paid by the acquirer or persons acting in concert with him for acquisition of shares of the target ... acquisition of shares etc. of the ....
2025 0 Supreme(SC) 314 • India - Supreme Court
SANJAY KUMAR, SANJIV KHANNA
(A) Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 - Regulation 20 - ... It is also highlighted by the appellants that the object and purpose of making a public offer is to ensure that the members of the public, who hold shares, can offload and sell their shares to the group which is acquiring shares at the threshold limit and which may, thereupon, have a say or control over ... of Shares and Takeovers) Regulations, 20112[“201....
• India - Dishonour Of Cheque
S.B.SINHA, N.S.HEGDE, A.K.MATHUR
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 - SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS REGULATIONS, 1997 - REGULATION ... shares. ... 501100 shares. ... Since no public announcement for acquisition of shares of the Target company has been made, which has adversely affected interest of shareholders of Target Company, it would be just and equitable to direct the Acquirer to pay interest @ 15% per annum on the offer price, the Acquirer is hereby accordingly ... Section 11 of t....
2002 0 Supreme(AP) 584 • India - Andhra Pradesh
L.NARASIMHA REDDY
restoration - Grant of relief claimed - Petitioner filed this writ petition seeking a writ of mandamus declaring transfer of lakhs shares ... Companies Act, 1956 - Section 111a , 397 and 398- Sick Industrial Companies (Special Provisions) Act, 1985 – Shareholders - Transfer of shares ... Regulation 10 of Securities and Exchange Board of India Regulations, 1997 and seeks a consequential direction for restoration of those shares ... Acquisition of Fifteen per cent or more of the shares or voting rights of....
2016 8 Supreme 106 • India - Supreme Court
ANIL R.DAVE, ADARSH KUMAR GOEL
(2014) 11 SCC 112 – Relied upon ... (b) SEBI (Substantial Acquisition ... of the target company and on account of default, it acquired the said shares representing 5.05% of the equity share capital. ... Acquisition of controlling interest of a company can be friendly or hostile. In a friendly acquisition, management of the target company sells its controlling shares to the acquirer. ... Irrespective of whether or not there has been any acquisition of shares....
2014 0 Supreme(SC) 359 • India - Supreme Court
S.S.NIJJAR, A.K.SIKRI
(a) SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 – Regulation 11 – Respondent making creeping acquisition ... (Para 25, 27, 32) ... (b) SEBI (Substantial Acquisition of Shares and ... (Para 30) ... (d) SEBI (Substantial Acquisition of Shares and Takeovers ... , the acquirers breached the 5% creeping acquisition limit and were required to comply with the provisions of Regulation 11 of the SEBI (Substantial ....
2015 6 Supreme 717 • India - Supreme Court
VIKRAMAJIT SEN, SHIVA KIRTI SINGH
(a) Securities & Exchange Board of India (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 – Regulation 11(1) – Requirement ... of public announcement for acquisition of shares of target company – Gets triggered if at any stage the shareholding of the entity ... of Shares & Takeovers) Regulations, 1997 – Regulation 11(1) – Appellant contending that whether the acquisition violated regulation ... The concept of permitting creeping acquisitions by permit....
2001 0 Supreme(Bom) 1034 • India - Bombay
D.Y.CHANDRACHUD, B.P.SINGH
the common objective or purpose of substantial acquisition of shares or voting rights for gaining control over the target company ... the common objective or purpose of substantial acquisition of shares or voting rights for gaining control over the target company ... of shares of the target company. ... Iqbal Chagla, appearing for Modipon Limited, submitted that the SEBI Regulations, 1997 regulated acquisition of shares, and not disinvestment of shares#HL_EN....
2016 0 Supreme(SC) 948 • India - Supreme Court
RANJAN GOGOI, N.V.RAMANA
(a) Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 – Regulation 22(7) ... ... As the acquisition was beyond the stipulated 15% of the equity share ... 11) ... (b) Securities and Exchange Board of India (Substantial Acquisition ... It is also submitted that the commencement of the ‘offer period’ from the date of public announcement would primarily have relevance to a case where acquisition of shares is fro....
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