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 :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: form 3cd :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: due date for vat payment :: ACCOUNTING STANDARDS :: cpt :: empanelment :: list of goods taxed at 4%
 
 
Latest Circulars »
 Reserve Bank of India Act, 1934 – Section 42(1A) Withdrawal of the Incremental CRR
 RBI-Transcript of Statement made by Shri R. Gandhi, Deputy Governor
 Requirement of customer due diligence and need for maintenance of records
 Card Not Present transactions – Relaxation in Additional Factor of Authentication for payments upto ₹ 2000/- for card network provided authentication solutions
 Auction of Government of India Dated Securities December 05, 2016
 Withdrawal of Legal Tender Character of the old Bank Notes in the denominations of ₹ 500/- and ₹ 1000/- (Updated as on December 05, 2016)
 RBI-Investment under PIS in M/s Laurus Labs Limited by FIIs/FPIs upto 49 per cent and NRIs upto 24 per cent
 RBI-Issuance of 35 days Cash Management Bills under Market Stabilisation Scheme (MSS)
 RBI-Information from Unauthenticated Sources – Advisory to banks
 RBI-Aadhaar-based Authentication for Card Present Transactions
 RBI-External Commercial Borrowings (ECB)

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 2016 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