Sebi board set for nod to Takeover Code

Sebi board set for nod to Takeover Code
The Securities and Exchange Board of India (SEBI) is poised to give the green signal to the Takeover Code at this month's board meeting, scheduled to be on June 27 although emerging reports suggest that it might be pushed back to June 30. After much deliberation with some of the leaders of the Indian industrial sector, SEBI has decided to amend certain rules and provisions.

The minimum offer trigger limit had been proposed to be increased from 15% to 25% by the Achuthan committee and while the investors share the same point of view with the committee on the offer trigger limit, the two sides part ways on the level of the mandatory open offer. The representatives of the industry want the open offer size to brought down to atleast 75% as against the 100% proposed by the committee.

“It is going to be a significant agenda, as the first board meet of the new chairman (U K Sinha) went unnoticed. The roadmap for the current financial year was the only notable matter decided in the March meet. The market is still waiting for some strong signals from the new regime.", said a source who did not want to be named.

The other important issue likely to be on the agenda of the meeting is the new regulations for mutual funds distribution. In 2009, former SEBI chief CB Bhave banned entry loads. However, Sinha, the current head of SEBI, feels levying a transaction fee of INR 100-150 is a necessary incentive that must be provided to make distribution of mutual funds more lucrative.

The upcoming meeting is also expected to restore the controversial G Mohan Gopal report on the IPO scam of 2006 that involved opening of thousands of fake demat accounts to corner shares in IPOs. That would enable SEBI to ask NSDL to initiate an investigation and thus establish individual responsibilities as Sebi is supposed to present its findings in front of the Supreme Court in August 2011.

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