Indian Takeover Legislation

There have been a lot of acquisitions of late that have involved one party in the nation of India, another somewhere else. For example, India's Reliance Industries in November offered to buy LyondellBasell Industries. Last month it sweetened that bid. Separately, Bharti Airtell has lately made a USD$9 billion offer for Zain Africa. This is its third attempt in two years to get an African presence.

Those are two instances in which Indian companies are the would-be buyer. But it stands to reason that Indian assets will come into the sights of outside corporations, as well. Accordingly, Sandeep Parekh, of the Indian Institute of Management, has offered us all a primer on Indian Takeover Regulation, which he calls "Under Reformed and Over Modified".

One paragraph from his abstract: "This paper argues that the complexity in the trigger points for disclosure and tender offer introduced over the years lacks a philosophy, and most of the amendments can not only be deleted but a very simple structure can be introduced making compliance of the regulations straight forward and easy to understand by management of listed companies. Certain other areas which need amendments have also been discussed. Chief amongst these are the provisions relating to consolidation of holdings, conditional tender offers, hostility to hostile acquisitions, definitional oddities, payment of control premium in the guise of non compete fees, treatment of differential voting rights, treatment of Global Depository Receipts and disclosure enhancements.