Achuthan Committee Submitted Report

The Takeover Regulations Advisory Committee which was constituted under the Chairmanship of C. Achuthan, submitted its report to C. B. Bhave, Chairman, Securities and Exchange Board of India (SEBI) on 19 July 2010. The committee had reviewed the existing law governing substantial acquisition of shares and takeovers. The Achuthan Committee on Takeover Regulations recommended an increase in the acquisition threshold for the initial trigger of an open offer from the current level of 15 per cent to 25 per cent of the voting capital of a listed company. No change was suggested in the annual creeping acquisition limit of 5 per cent. The committee, however, recommended that creeping acquisition be permitted only to those acquirers who already hold more than 25 per cent of the voting capital and that the creeping acquisition be subjected to the aggregate post-acquisition shareholding not exceeding the maximum permissible non-public shareholding. The panel also recommended the increasing of open offer size from 20% to 100%. This would result in making acquiring and controlling of shares more costly.