More time needed on takeover code: SEBI

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) today said it needs more time to decide on the new takeover code - wherein proposals have been made to give retail investors parity with promoters, and also for open offer for cent per cent stake in acquisitions, reports PTI.

A decision could not be made in today's board meeting and the issue would be taken up again in the next meeting of the board, SEBI chairman CB Bhave told reporters here.

The regulator has already collated all the public comments on the proposed draft Takeover Code.

In July, a SEBI committee, under the chairmanship of C Achuthan, had proposed changes in the current takeover rules, to give more rights to minority shareholders.

The panel had also recommended making it mandatory for acquirers to make an offer for up to 100% stake in any listed company.

At present, an open offer for a minimum of 20% in is required to be made by any entity that has purchased 15% equity, either from the promoters or the open market.

The committee had also suggested an increase in the open offer trigger point to 25%, from 15% now.

Sources said that there have been mostly positive comments on the guidelines proposed in the draft Takeover Code, especially for the one enhancing the public offer trigger point to 25%.

However, there is no unanimous view on acquirers being asked to make an offer for the entire 100% holding in the public offers so that public shareholders also get an opportunity along with promoters to exit.

The new code has also proposed to bring in parity in pricing for promoters and non-promoter shareholders. It proposes that minority shareholders also get the same price as a substantial shareholder and provide a level playing field to all stakeholders, whether they are promoters or small investors.

At present, the promoters and some large shareholders get better price by way of non-compete fees and other payments from the buyers and these are not available to small investors.


No further change in timing of DTC implementation: MoS, finance

Chennai: The Centre today ruled out any further change in the scheduled implementation of Direct Taxes Code (DTC) from 1 April 2012 and said suggestions on the related bill, pending with a Parliamentary panel, could still be given, reports PTI.

"It will be implemented on 1 April 2012. There is no change in that...", Union minister of state for finance S Palanimanickam told reporters. He said the bill was currently discussed at various levels.

The parliamentary standing committee would give its report and the Government would take a decision on the implementation, Mr Palanimanickam said.

Earlier, at a seminar on DTC, organised by All India Tax Payers' Association and Periyar Maniammai University, he appealed to the participants to make suggestions for modifications to the proposals.

"There is still time for you to express any issues on the code." he said, adding that any modifications on the DTC could also be sought.

After criticism by various quarters, the government had dropped its earlier proposals on taxing long term savings like provident funds and imposing minimum alternate tax (MAT) on gross assets of companies.

In August, the government decided to delay the implementation of DTC by a year from 1 April 2012. Earlier, DTC was supposed to be implemented from 1 April 2011.

The government would lose about Rs53,000 crore in tax revenue on account of the increase in exemption limits and tweaking of slabs in the Direct Taxes Code Bill.

Income Tax chief commissioner (I and CCA region) Prema Malini Vasan said through this move any body can understand on the terms used in the DTC. "Earlier, if a lawyer needs to know about the DTC, then he should either learn chartered accountancy or approach a CA. But by making modifications, even a common man can understand it..," she said.

The delayed implementation of the DTC, which is a replacement of Income Tax Act 1961, would give corporates and individuals enough time to set themselves on the right foot for the switchover.

As per the Bill, income of Rs2-5 lakh would be taxed at 10%; Rs5-10 lakh at 20% and above Rs 10lakh at 30%.


Probe into SKS still on: Bhave

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) today said it is still investigating the issue of SKS Microfinance sacking its CEO Suresh Gurumani - which raised the hackles of investors - shortly after a successful Rs1,600 crore public offer, reports PTI.

"The investigation is still on..," SEBI chief CB Bhave told reporters here.

After raising Rs1,600 crore through an initial public offer (IPO) in August, the Hyderabad-based company on 4th October terminated the services of Mr Gurumani four years ahead of the expiry of contract and named M R Rao as his successor.

Mr Gurumani had a five-year contract starting from 1 April 2009.

A few days later on 14th October SEBI in a communiqué to the company had asked whether the termination of Mr Gurumani was planned when SKS had filed the draft prospectus in March for the IPO.

The company replied to the SEBI questionnaire the following day, but declined to make public the details.

Mr Gurumani was earlier director at consumer banking at Barclays. After his sacking SKS founder Vikram Akula has become the executive chairman.

The matter reached the Andhra Pradesh High Court later which allowed him to continue as a director on board till final orders.


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