India Regulator Says Open Offer Required When Control Acquired

U.K. Sinha, chairman of the Securities and Exchange Board of India, comments on the definition of control in the regulator’s takeover code. Sinha made the comments to reporters in New Delhi in response to a question whether control was defined differently in rules pertaining to foreign direct investment in the nation’s civil aviation industry.

The Foreign Investment Promotion Board deferred a decision on Etihad Airways PJSC’s plan to acquire a 24 percent stake in Jet Airways (India) Ltd. as authorities sought more details from Jet about its “effective control and ownership,” Economic Affairs Secretary Arvind Mayaram said June 14.

“Sebi’s position is very clear about any deal. I’m not talking about any specific deal. If somebody has acquired stake in a company beyond a certain threshold, then that acquirer has to make an open offer.”

“Even if the acquirer has got less than threshold, but he has got control over the company, then he has to make an open offer. So, Sebi will be looking into any case when there is suspicion or belief that control has been acquired.”

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