Sebi asks additional disclosures under takeover regulations

Market regulator Sebi today asked entities acquiring substantial shares in listed companies to make additional disclosures regarding pledging of scrips, a move that will help investors to make an informed decision.

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"In order to ensure that adequate disclosures are made to help investors in taking an informed decision, it has been decided to modify the formats for disclosures" under relevant clauses of the Substantial Acquisition of Shares and Takeovers Regulations, Sebi said in a circular.

These disclosures are required to be made by any entity hiking its stake to five percent or more in a listed company, while entities already holding five percent stake are also required to make disclosures at the time of every purchase of two percent of more stake.

Besides, additional disclosures are required for encumbered or pledged shares. In today's circular, Sebi said that the formats are being changed for all these three disclosures. In new disclosures, the acquirer entity would need to make disclosures about whether "shares (being acquired are) in the nature of encumbrance (pledge or lien or non-disposal undertaking."

Besides, the acquirer also needs to inform the "features of securities acquired including time till redemption, ratio at which it can be converted into equity shares etc." The regulator has asked promoter to disclose details of shares in the company encumbered shares by him or persons acting in concert (PAC) with him.

Besides, the promoter needs to inform about any invocation or release of such encumbrance or of shares. Sebi has also sought additional disclosures about details of the acquirer and the Persons Acting in Concern with the acquirer, their Permanent Account Numbers (PANs) and whether they belong to the promoter group. These three particular details would need to be disclosed to the stock exchanges, without being disseminated further.

The regulator said that total share capital or voting capital needs to be taken as per the latest filing done by the company to the stock exchanges.