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
Date Written: December 1, 2010
The instant paper discusses the critical verdict passed by SAT in case of Subhkam Ventures (I) (P.) Ltd. v. SEBI  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
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