Mumbai: The stock market regulator Securities & Exchange Board of India (Sebi) said on Monday it would amend its rules after it was approached by Satyam Computer Service’s government-appointed board for some exemptions from open offer rules, but gave no timeframe.
“We will amend our regulations through guidelines to enable a transparent process for arriving at a price in case of such acquisitions,” C.B. Bhave, chairman of Sebi told media after a board meeting.
Bhave said rather than create a one-off exemption for fraud-hit Satyam, the regulator would amend its regulations.
“We must have a mechanism to deal with abnormal cases,” he said.
Under India’s takeover code, an investor who acquires 15% of a company needs to make an open offer for another 20% at a price, which is not less than the average share price of the previous six months.
Satyam shares have fallen sharply since mid-December, first on a planned deal to buy companies related to the founders and then after revelations in early January of massive accounting fraud.
The six-month rule meant a buyer of more than 15% of Satyam would be have to make an open offer at a price almost six times Monday’s closing price of Rs57.60.
Leading engineering and construction firm Larsen & Toubro has built up a 12% stake to be the biggest shareholder in Satyam.