Monday, February 4, 2013

SEBI revises rules for amalgamation of companies:4/2/2013

SEBI revises rules for amalgamation of companies:4/2/2013

The Securities and Exchange Board of India (SEBI) on 

Monday revised rules for merger and amalgamation of 

companies, which requires stricter valuation of entities.

In the recent past, SEBI said it “received applications seeking

 exemption from certain entities containing inadequate 

disclosures, convoluted schemes of arrangement, 

exaggerated valuations, etc.

SEBI is of the view that granting listing permission or 

exemption from the requirements based on such applications

would not be in the interest of minority shareholders. At the 

same time, if listing permission or such an exemption is 

delayed or denied, it would add to the uncertainty and would

 deprive shareholders of an exit opportunity.

The stock exchanges were also asked to process the draft

 scheme (including seeking clarifications from company 

and/or opinion from an independent chartered accountant) 

and forward their “objection/no-objection” letter on the draft

 scheme to SEBI. SEBI also asked exchanges to disclose the 

also disclose the observation letter of the stock exchanges on

 its website within 24 hours of receiving the documents.

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