Impact of Zenotech Case on Indirect Acquisitions

Company Law Journal, July 2010

9 Pages Posted: 31 Jul 2011 Last revised: 29 Aug 2011

See all articles by Murtuza Bohra

Murtuza Bohra

Associate at Bohra Associates Indore

Date Written: July 30, 2010


Merger and acquisition activity is booming in India. The Indian economy grew by 9.2% in 2006, but in fact M&A deal volumes surged much faster, up 54% to $ 28.2 billion in 2006. The advent of 2007 witnessed the signing of the largest inbound deal in India’s history, Vodafone’s $ 11.1 billion acquisition of a controlling interest in Hutchison Essar, India's fourth-largest mobile phone company, while Tata Steel's $ 13.2 billion dollar acquisition of the European steelmaker, Corus, which closed in early January 2007, dominated the acquisitions of foreign companies by Indian corporate enterprises in the past years. The Indian Mergers and Acquisitions are governed by Securities Exchange Board of India (Substantial Acquisition of Shares and Takeover Regulation) 1997 (“Takeover Code”) which has witnessed great amount of litigation recently. Thus, this draws our attention toward one of such relevant aspect viz. indirect acquisition with regard to offer pricing.

This paper seeks to discuss the indirect acquisitions governed under the Takeover Code. Although the Takeover Code is comprehensively drafted but there seems to be grey area with regard to the indirect acquisition especially from the perspective of the timings of the public announcement and pricing of the public offer. Securities Appellate Tribunal has succeeded in setting up a guiding line for such takeovers recently in the case of Dr. Jayaram Chigurapatti v. SEBI (Zenotech case). This paper intends to elucidate the law relating to indirect takeovers while discussing the landmark judgment in Zenotech case.

Keywords: Acquisition, indirect acquisition, M&A, Zenotech

Suggested Citation

Bohra, Murtuza, Impact of Zenotech Case on Indirect Acquisitions (July 30, 2010). Company Law Journal, July 2010. Available at SSRN:

Murtuza Bohra (Contact Author)

Associate at Bohra Associates Indore ( email )

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

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