The Securities and Exchange Board of India will amend the takeover code after it has been approached by Satyam Computer Services' government-appointed board for some exemptions from open offer rules.
"We will amend our regulations through guidelines to enable a transparent process to arrive at a price in case of such acquisitions," Sebi Chairman C B Bhave told reporters after a board meeting in Mumbai on Monday.
The six-member Satyam board has told Sebi that the company's stock prices before January 7, the day founder Ramalinga Raju confessed to fraud, are no longer relevant as they reflected a set of numbers put out by the company that are not valid. Even the company's former auditor Price Waterhouse has disowned the accounts.
Bhave said rather than create a one-off exemption for Satyam, the regulator will amend its regulations. "We must have a mechanism to deal with abnormal cases," he said. He, however, gave no timeframe for the amendment and said the Sebi board is aware of the urgency with which such matter needs to be dealt with. Under the takeover code, an investor who acquires 15 per cent of a company needs to make an open offer for another 20 per cent at a price which is not less than the average share price of the previous six months.
Satyam's shares have fallen sharply since mid-December, first on a planned deal to buy companies related to the promoters and then after revelations in early January of massive accounting fraud.
The six-month rule means a buyer of more than 15 per cent of Satyam will have to make an open offer at a price almost six times Monday's closing price of Rs 57.60.
Larsen & Toubro has built up a 12 per cent stake to become the biggest shareholder in Satyam and is believed to have asked for a waiver of the current open offer pricing norms. The other bidders, HCL Technologies, Tech Mahindra, B K Modi's Spice group and the Hindujas will also benefit from the modification in the norms.
