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December 16, 2000 		Feedback  
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SEBI may not to alter penalties, pricing norms

NetScribes/Salil Panchal

The Securities and Exchange Board of India (SEBI) is likely to retain existing norms relating to penalties for non-disclosures and pricing of acquisition offers while considering revisions in the current takeover code.

"We will not tinker around too much with norms relating to penalties for non-disclosures in a takeover offer and pricing of such offers while considering revisions. Areas which have stood the test of time need not be altered,'' a SEBI official said on condition of anonymity.

Senior SEBI officials met corporate bigwigs on Friday, including Arun Nanda and Prannoy Vakil of the Mahindra Group. Nanda spoke on the issues of whether changes should come into the creeping acquisition mode and the minimum offer limit for the takeover code to be triggered.

The SEBI takeover code committee has, over the past three days, examined presentations from various market intermediaries - including corporates and merchant bankers - to understand their views on critical issues relating to the takeover code.

The five main areas which SEBI will address are: altering the creeping acquisition limits for promoters; consolidation of holdings by promoter; minimum limit for making open offer; penalties relating to non-disclosures while making acquisition; and pricing norms for the takeover offer.

With the current round of talks now complete, a five-member panel comprising Justice P N Bhagwati (who heads the takeover committee), CII representative N Sonawalla, Nimesh Kampani of JM Morgan Stanley, solicitor Sharadul Shroff and senior SEBI executive director O P Gehrotra will consider the draft report and finalise changes. This meeting will take place on December 26.

This panel will then take the draft report to a full committee in mid-January 2001. At this stage, it will suggest changes in the existing takeover code following which the SEBI board will announce the necessary changes.

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