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Shubhkam Case - Definition of ‘Control’ in M&A Transaction: Negative Power or Positive Power?

Consolidated Commercial Digest, Vol. 27, December 2010

9 Pages Posted: 31 Jul 2011  

Murtuza Bohra

Associate at Bohra Associates Indore

Date Written: December 1, 2010

Abstract

The instant paper discusses the critical verdict passed by SAT in case of Subhkam Ventures (I) (P.) Ltd. v. SEBI [2010] 99 SCL 159 (SAT-MUM).This case has given an unprecedented and crucial interpretation of the Takeover Code relating to the control which is given under section 2(1)(c). The verdict has rather brought smiles for the investor community linked with the PIPE (Private investment in Public Equity) transaction. It has legitimized the investor’s action of including supermajority rights without being called as ‘control’ and hence exempting it from the mandates of Regulation 12. The SAT’s decision has been widely acclaimed but it is also criticized as been favoring a class of investor. Thus, it leaves scope to analyze the relevant provisions of the Takeover Code vis-à-vis the verdict of SAT.

Keywords: Private Equity, Takeover Code, PIPE, Subhakam

Suggested Citation

Bohra, Murtuza, Shubhkam Case - Definition of ‘Control’ in M&A Transaction: Negative Power or Positive Power? (December 1, 2010). Consolidated Commercial Digest, Vol. 27, December 2010. Available at SSRN: https://ssrn.com/abstract=1898991

Murtuza Bohra (Contact Author)

Associate at Bohra Associates Indore ( email )

M-47, Trade Center, 18/2, South Tukoganj
Indore
India

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