Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: form 3cd :: ACCOUNTING STANDARD :: TDS :: VAT RATES :: cpt :: empanelment :: VAT Audit :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4%
 
 
Latest Circulars »
  RBI releases Handbook of Statistics on Indian States 2016-17
  RBI amends Banking Ombudsman Scheme: Includes Complaints relating to Misselling and Mobile/ Electronic Banking
 RBI releases Handbook of Statistics on Indian States 2016-17
 RBI amends Banking Ombudsman Scheme: Includes Complaints relating to Misselling and Mobile/ Electronic Banking
 Recording of Details of Transactions in Passbook/ Statement of Account
 Exclusion of “The Royal Bank of Scotland N.V.” from the Second Schedule to the Reserve Bank of India Act, 1934
 Monitoring of Foreign Investment under PIS in Indian Companies- Removal from Ban List - FIIs/RPIs : M/s IDFC Limited
 FIIs/FPIs can now invest 24 to 49 per cent under PIS in M/s Satin Creditcare Network Limited
  Bankers & SME Borrowers: The Emerging Mantras (Shri S. S. Mundra, Deputy Governor – June 16, 2017 – at the 3rd Bankers Borrowers Business Summit organized by ASSOCHAM in New Delhi1)
 RBI extends Directions issued to Navodaya Urban Co-operative Bank Ltd, Nagpur, Maharashtra
 Developments in India’s Balance of Payments during the Fourth Quarter (January-March) of 2016-17

Reliance Power wont challenge Sebi regulation on mergers and amalgamations
November, 21st 2013

Reliance Power has decided not to challenge the applicability of the market watchdog Securities and Exchange Board of India's circulars relating to mergers and amalgamations, which affected its proposed restructuring with Reliance Clean Power, a wholly-owned subsidiary.

Earlier, Reliance Clean Power had proposed to be merged with parent company and had approached the court against Sebi's stand. The capital market regulator had declared that its permission was mandatory before any merger or demerger of subsidiaries was proposed with listed entities. Later, Reliance Power filed a plea against Sebi over restructuring process with Reliance Clean Power.

Billionaire Anil Ambani's Reliance Power had taken the view that company doesn't need approval from market regulator to merge its unlisted company with itself. However, Sebi had said that it will examine company's scheme before it goes through.

While filing the scheme for amalgamation in the Bombay High Court, Reliance Power argued that company has not issued any fresh shares, but this scheme is merely for transfer of wholly-owned subsidiary within; hence, there is no need for market regulator's nod for the merger.

"The high court has not ruled on this point because, as stated in the order, Reliance Clean Power decided not to pursue this line of challenge," said Srishti Jha, partner, Desai & Diwanji. "The order expressly states that the interpretation point is kept open for adjudication in future cases. Therefore, while the position of the regulators is not so difficult to read, till Sebi issues a formal circular or the courts issue a definitive verdict on the point, the interpretation may remain open to challenge."

Many large Indian conglomerates and Indian subsidiaries of MNCs, especially in sectors such as infrastructure, retail, manufacturing and pharmaceuticals, were watching the case closely as companies often restructure subsidiaries to gain better operation efficiencies. An email and phone query to Reliance Power did not fetch any results.

"Industry practice suggests that any scheme of amalgamation involving a listed company must be approved by the Sebi pursuant to the February circular," says Neerav Merchant, senior partner, Majmudar & Partners. "This procedure has been followed even in the merger of Ambuja Cements (a listed company) with Holcim India (an unlisted company), to acquire a stake in ACC."

"For minority shareholders, especially private equity investors and FIIs who have small shareholding in companies, this means that such shareholders can have a meaningful say in the manner in which such schemes of arrangements are carried out," says Simone Reis, cohead, M&A, Nishith Desai & Associates.

"There have been mixed views arising out of the Sebi M&A Circulars. One particular criticism is that the circulars do not differentiate between different kinds of schemes of arrangements. For instance, schemes of amalgamation between a parent and its long-term whollyowned subsidiary may not require such scrutiny as the interests of the minority shareholders remain unaffected. This may result in unnecessary procedural compliances and delays."

The Sebi came out with the circular in February and May 2013 relating to amalgamations.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Vision

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions