The Telegraph
Since 1st March, 1999
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Changes in takeover code by June

New Delhi, April 30: The takeover code will be amended by June, Sebi chairman M. Damodaran said here today but ducked a question on whether he would accept India Inc's demand to amend a rule that requires promoters acquiring companies to scale back their holding to 55 per cent.

Earlier, promoters were allowed to hold up to 75 per cent and the rule change has drawn strong protest.

'We have an open mind on the changes. There are some areas that need improvement. After discussions with Ficci, CII and a group of individuals, and detailed internal examinations, we have commenced the process of revising the takeover code,' Damodaran told reporters on the sidelines of a seminar here.

'Our expectation is that the process should be completed in the next two weeks and we should be able to get a broad discussion on this in the next board meeting by the end of May. If the change does not happen in May, they will certainly happen in June,' he said.

'The present reduction in the ceiling on acquisition from 75 to 55 per cent is not warranted and will unnecessarily cause problems for many promoters,' Ficci member Siddharth Birla said.

Moreover, he said, 'Sebi needs to bring in clarity into this by amending the listing agreement specifying clearly the minimum limit as 10 or 25 per cent as the case may be, with appropriate transition provisions.'

Damodaran said Sebi was in the process of revamping all the regulations to make them simpler. 'We will scrap a number of redundant regulations. Some of the regulations will be integrated with others and written in a simple language.'

Damodaran also said plans were afoot to move on to a modern T+1 (transaction date plus one) settlement system for shares once the banking sector was ready for it.

Reliance issue

Sebi, along with the department of company affairs (DCA), is looking into the recent developments in the Reliance group.

'Sebi is expected to look at all listed companies,' Damodaran said when asked if the regulator was looking at the breach of corporate governance norms by Reliance Industries, as was alleged by its vice-chairman Anil Ambani. Damodaran further said Sebi along with other regulators like DCA will look into the affairs of all listed companies.

'There are listed companies and unlisted companies. As far as unlisted companies are concerned, Sebi has no jurisdiction on them. What happens within listed companies is looked at by a number of regulators. Depending on the issue involved, Sebi will study some issues, DCA will look into some and somebody will look into some other issue,' he said.

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