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.