New company law regime may put M&As on fast track

Apart from the Companies Act, there are several aspects in relation to other types of restructuring. These include a large number of tax issues. For example, in case of a demerger, the current definition of “demerger” under the I-T Act requires the transfer of assets at book value, which is restrictive and needs to be done away with. Similarly, in the case of acquisitions, sellers who tender shares in an open offer should also be entitled to capital gains exemption. There is another regulatory requirement of taking the approval of stock exchanges, which sometimes causes delays and needs to be addressed. One of the objectives of the committee was to put in place a transparent, simple and globally acceptable system so as to make India a globally competitive investment destination. Clearly, what has been recommended and what the government is trying to achieve is laudable. What is important is for the government to address all aspects of the activity and take concrete and meaningful steps to put M&As on the fast track.

Ketan Dalal is executive director of PricewaterhouseCoopers. Your comments and feedback are welcome at groundrules@livemint.com