Companies (Compromises, Arrangements & Amalgamations) Amendment Rules 2020

The Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2020. Takeover offer provisions become effective

Government of India
Ministry of Corporate Affairs
Notification

New Delhi, dated the 3rd February, 2020

G.S.R. _ (E). -In exercise of the powers conferred by sub-sections (1) and (2) of section 469 read with section 230 of the Companies Act,2013 (18 of 2013), the Central Government hereby makes the following rules, further to amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, namely :-

1. Short title and commencement– (1) These rules may be called the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2020.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, (hereinafter referred to as the principal rules), in rule 3, after sub-rule (4), the following sub-rules shall be inserted, namely: –

“(5) A member of the company shall make an application for arrangement, for the purpose of takeover offer in terms of sub-section (11) of section 230, when such member along with any other member holds not less than three-fourths of the shares in the company, and such application has been filed for acquiring any part of the remaining shares of the company.

Explanation I. –

“shares” means the equity shares of the company carrying voting rights, and includes any securities, such as depository receipts, which entitles the holder thereof to exercise voting rights. Explanation II.-Nothing abcaus.in in this sub-rule shall apply to any transfer or transmission of shares through a contract, arrangement or succession, as the case may be, or any transfer made in pursuance of any statutory or regulatory requirement.

(6) An application of arrangement for takeover offer shall contain:

(a) the report of a registered valuer disclosing the details of the valuation of the shares proposed to be acquired by the member after taking into account the following factors: –

(i) the highest price paid by any person or group of persons for acquisition of shares during last twelve months;

(ii) the fair price of shares of the company to be determined by the registered valuer after taking into account valuation parameters including return on net worth, book value of shares, earning per share, price earning multiple vis-a-vis the industry average, and such other parameters as are customary for valuation of shares of such companies.

(b) details of a bank account, to be opened separately, by the member
wherein a sum of amount not Iess than one-half of total consideration
of the takeover offer is deposited.”.

3. In the principal rules, in Schedule of Fees, for S.No. 1, the following shall
be substituted namely: –

[F. No. 2/31lCAA/2013-CL.V]

(K.V.R. Murty)
Joint Secretary to the Government of India

Note: The principal rules were published in the Gazette of India, extraordinary, Part II, Section 3, sub-section (i) vide number G.S.R 1134 (E) dated the 14th December, 2016 and amended vide notification number G.S.R. 368(E) dated the 13th, April, 2017.

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Government of India
Ministry of Corporate Affairs

NOTIFICATION

New Delhi, the 3rd February, 2020

S.O. (E). In exercise of the powers conferred by sub-section (3) of section 1 of the Companies Act, 2013 (18 of 2013), the Central Government hereby appoints the 3rd day of February, 2020 as the date on which the provisions of sub-sections (11) and (12) of section 230 of the said Act shall come into force.

[F. No. 2/31/CAA-2013-CL-V (Part)]

( K V R Murty)
Joint Secretary to the Government of India

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