Exemption from making an open offer under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011

January 9, 2018
ISSUE No. 03
january 16, 2018


India: Exemption from making an open offer under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011

Securities and Exchange Board of India


Exemption from open offer

As per the notification dated December 22, 2017, the Securities and Exchange Board of India (hereinafter referred to as the ‘Board’) by virtue of Regulation 11(1) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as the ‘SAST Regulations’), has given power to the Board to grant exemption from the obligation to make an open offer for acquiring shares. The reasons shall be recorded in writing for granting such exemption by the board along with any conditions if imposed.

Further, as per Regulation 11(3) of SAST Regulations, the target company shall file an
application with the Board, supported by a duly sworn affidavit, giving details of the proposed acquisition and the grounds on which the exemption has been sought.

Power of SEBI to formulate regulations

In exercise of the powers conferred by Section 30 of the Act, SEBI has framed the SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as “the SAST Regulations 2011”).

Takeover and substantial acquisition

The Takeovers & Substantial acquisition of shares is when an “acquirer” takes over control of the “Target Company”, it is termed as Takeover. When an acquirer acquires “substantial quantity of shares or voting rights” of the Target Company, it results into substantial acquisition of shares.

Acquisition and Target Company

Acquirer means any person who, whether by himself, or through, or with persons acting in concert with him, directly or indirectly, acquires or agrees to acquire shares or voting rights in, or control over a target company. An acquirer can be a natural person, a corporate entity or any other legal entity. The company / body corporate or corporation whose equity shares are listed in a stock Exchange and in which a change of shareholding or control is proposed by an acquirer, is referred to as the ‘Target Company’.

In order to ensure uniformity of disclosures in such applications, it has been decided to provide a standard format for filing of application with SEBI for exemption.

Grounds for exemption

  • the target company is a company in respect of which the Central Government or State
    Government or any other regulatory authority has superseded the board of directors of the target company and has appointed new directors under any law for the time being in force, if,—

    • Such board of directors has formulated a plan which provides for transparent, open,
      and competitive process for acquisition of shares or voting rights in, or control over the target company to secure the smooth and continued operation of the target company in the interests of all stakeholders of the target company and such plan does not further the interests of any particular acquirer.
    • The conditions and requirements of the competitive process are reasonable and fair; <
    • the process adopted by the board of directors of the target company provides for details including the time when the open offer for acquiring shares would be made, completed and the manner in which the change in control would be effected; and
  • Exemption from strict compliance with one or more of such provisions is in public interest, the interests of investors in securities and the securities market.


India: IBC comes to rescue of the unpaid employees

The Insolvency & Bankruptcy Code


Incorporated with the objective of promoting maximization of value of assets in a time bound manner, the Insolvency and Bankruptcy Code (hereinafter referred to as “IBC”) works towards effective protection to honest creditors against unscrupulous debtors who may misuse insolvency to evade of their liabilities. The conducive and efficacious implementation of the IBC has instilled confidence in the creditors for a systematic and speedy reform. The remedy under the IBC is also available to the unpaid employees of the debtor which is now being recognized judicially as well.

Recently, the National Company Law Tribunal admitted a case for non-payment of salaries to the employees under the IBC. As per the provisions of the IBC, employees are considered to be the operational creditors in respect of the pending salaries which would be computed as dues on the account of the employer.

The employees of a number of companies including Zeal Global projects, Applied Electromagnetics Pvt. Ltd. and Phadnis Properties have initiated recovery proceedings under the IBC. The time limit of 180 days for resolution of the proceedings helps in the quick disposal and reposes faith in justice.

With the advent of the IBC, there is an expectation of the settlement of the issues regarding payment of unpaid salaries to the innocent and sincere employees who delivered their services during the tenure of their employment when the employer may seek an escape towards his duties under the shield of insolvency.


India: Condonation for Shell Companies’ Disqualified Directors

In exercise of the powers conferred by Section 30 of the Act, SEBI has framed the SEBI

Ministry of Corporate Affairs


The Government of India this year introduced a number of methodologies in order to ensure that shell companies do not become a medium of illegal activities like black money and corruption. From restrictions in the laying down of a number of subsidiary companies to the disqualification of shell companies and their directors. The Government also initiated an action to be taken by the Serious Fraud Investigation Office to investigate the affairs of the companies which were involved in depositing and withdrawing large sums during demonetization and impose appropriate penal actions in the said regard. Amidst such noose tightening, the Ministry of Corporate Affairs (hereinafter referred to as the “Ministry”) brings a relief to the defaulting companies and their directors by outlining a draft scheme for condonation of delay.

Over 300,000 Directors were recently disqualified by the MCA for their default in filing company annual returns[1] . Also, over 200,000 lakh companies were termed as defaulting companies and their names were struck-off from Registrar of Companies (hereinafter referred to as “RoC”) for failing to comply with regulatory requirements. The said action by the RoC was taken under the provisions of Section 248 (1) of Companies Act, 2013, which relates to the Power of the Registrar to remove the name of company from the register of companies.

The Department of Financial Services through the Indian Banks Association, had advised banks to take immediate steps to put restrictions on bank accounts of such struck-off companies.

Ministry has introduced the scheme for condonation of delay, 2018. The Condonation of Delay Scheme will be operational for a period of three months only (i.e. January 1, 2018 to March 31, 2018). The Scheme is an opportunity for the defaulting companies to rectify their negligence. The provisions of the said scheme allow the following with respect to the defaulting companies:

  • Temporary activation of the Director Identification Number (DIN) of the disqualified directors to enable them file the overdue documents.
  • E-filing of the pending overdue documents by the defaulting company after the payment of the prescribed statutory fees and applicable additional fee.
  • Filing of the application seeking coronation of delay along with the requisite fees of INR 30,000/- (approx. USD 467).

The scheme envisages the temporary reactivation of the Director Identification Number (DIN) of the directors associated with the “defaulting company” for the online submission of the below mentioned documents:-

  • Form Number 20B/MGT-7- Form for filing Annual Return by a company having share capital.
  • Form 21A/MGT-7- Particulars of Annual return for the company not having share capital.
  • Form 23AC, 23ACA, 23AC-XBRL, 23ACA-XBRL, AOC-4, AOC-4(CFS), AOC (XBRL) and AOC-4(non-XBRL) – Forms for filing Balance Sheet/Financial Statement and profit and loss account.
  • Form 66- Form for submission of Compliance Certificate with the Registrar.
  • Form 23B/ADT-1- Form for intimation for Appointment of Auditors.

The concerned Registrar shall then withdraw the prosecution(s) pending if any before the concerned Court(s) for all documents filed under the scheme.

The scheme comes in furtherance of the number of writ petitions filed by the disqualified directors seeking relief against such disqualification. The implementation of such scheme would accord a fair opportunity to the defaulting entities to rectify all the flaws and come within the ambit of legal mainstream.


[1] MCA General Circular No.16/2017


India: National Science Centre: Innovation Festival 2018

National Science Centre: Innovation Festival 2018

Realizing the importance of Innovation and the impact of experimentation and scientific method in shaping logical thinking among our community, the National Science Centre is organizing Innovation Festival during 20th to 21st January, 2018. It aims to foster a passion and aptitude for science and technology and to provide a unique platform to Innovative and creative Innovators.


The Innovation Festival would have-

  • Innovation Fair
  • Make it at Science Centre
    • Art
    •  Sculpture
    • Build from Scrap
  • Creative Robo Design
  • Innovative Challenges
  • Family Science Quiz
  • Popular Science Lecture
  • Idea Contest

Innovation Festival is open ended, encouraging and generous in Spirit. It is about participation, not competition. The Festival is an all age showcase and celebration of Invention, creativity and resourcefulness. This is a place to meet and interact with likeminded innovators from different walks of life. It will support discovery and exploration while introducing new tools for advance design. Other objectives are fostering creativity in people and to make them agent of change in their personal life and their community.

General Schedule of Events are as follows:

Inaguration followed person
Event Date Time
Inaguration followed by popular Lecture by eminent person 20th January, 2018 11:00 AM to 12:00 Noon
Innovation Fair 20th to 21st January, 2018 10:00 AM to 4:00 PM
Create Robo Design 21st January, 2018 10:00 AM to 3:00 PM
Make it at Science Center
c)Build from Scrap
20th to 21st January, 2018 10:00 AM to 4:00 PM
On the spot Design contest/Innovation
Challenges(Open for famnilies)
21st January, 2018 10:30 AM to 12:30 PM
Familt Science Quiz 21st January, 2018 02:00 PM to 4:00 PM
Idea Contest idea can dropped in Box kept at Fair 20th to 21st January, 2018(Afternoone)
Valediction 21st January, 2018 4:00 PM Onwards
For more information please contact us at : info@ssrana.com