The country's corporate takeover rules entered a new phase on Monday with a panel set up by the market regulator recommending that a party launching open offers for shares in listed companies must offer to buy 100 per cent stakes– and delist if the investors take the offer.
The Takeover Regulations Advisory Committee headed by C. Achuthan also recommended a rise in the trigger ceiling to 25 per cent from the current 15 per cent for a mandatory public offer to minority shareholders to kick in.
The panel's recommendations must be accepted by the board of the Securities and Exchange Board of India (SEBI) to take effect.
Achuthan explained the move aimed at helping minority shareholders by saying that the ground reality had changed since the last round of rules 16 years ago.
"In 1994 the promoters holding was less and with 10 per cent and you could control the company with that," he said.
The report said formalities in takeover offers must be done in 57 business days, against 95 calendar days at present.
"The 25 per cent has a significance in the company law and the shareholders with that stake can take up the issues of minority shareholders," said Shardul Shroff, managing partner at law firm Amarchand Mangaldas.