INDIA Law and Practice Contributed by: Anand Lakra, Shivpriya Nanda, Zain Pandit and Ami Shah, JSA Advocates & Solicitors
required to obtain security clearance before they are appointed to the board of Indian companies.
the notification form, increased to INR5 (approximately USD593,965) from INR1 crore (approximately USD118,793). Company Laws Amended to Allow Fast-Track Cross-Border Mergers Rules governing compromises, arrangements and amalgamations in India have been amend - ed to permit fast-track cross-border mergers instead of going through the lengthy (pre-amend - ment) NCLT-approval process. This amendment facilitates “reverse flipping” by merging foreign holding companies with and into their Indian wholly-owned subsidiaries subject to certain conditions. Offshore entities can look to seam - lessly relocate to India and consolidate value in the parent company in India with the goal of tap - ping into the booming IPO markets. Special Rights Under the Listing Regulations In an attempt to enforce governance and dis - closure standards for listed entities, SEBI intro - duced an amendment in 2023 to disclose and approve any special rights granted to the share - holders of listed entities. In terms of the Listing Regulations, it is now mandatory to disclose any special rights (including but not limited to director nomination rights, drag, tag, right of first refusal) available to any person in a listed entity and also seek shareholder approval by way of a special resolution once every five years for such rights. 3.2 Significant Changes to Takeover Law While there have not been any significant amendments to takeover law in 2024, SEBI acknowledged the issue with the corruption of open offer pricing due to the leak of unpublished price-sensitive information and, accordingly, has legislated that the price movement on account of any confirmation of the reported event or
3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments Delisting Regulations SEBI has introduced the fixed price method for delisting publicly traded companies. Multiple “take privates” have failed over the years due to arbitrageurs demanding a high premium over the ruling market price which was discovered through the reverse book build process. SEBI recognised that this was detrimental to overall dealmaking and has introduced the concept of offering a fixed price for delisting publicly traded companies. Government Notifies Changes to Indian Merger Control Regime In September 2024, the Indian merger control regime was revamped after amendments were introduced to the Competition Act and the underlying regulations. The key amendments are: • the introduction of DVT (as explained in 2.4 Antitrust Regulations ); • the codification of “material influence” as a standard for control in addition to de facto and de jure control; • the implementation of open offers or on-mar - ket purchases pending CCI approval subject to certain conditions; • the imposition of a penalty of up to 1% of the deal value of the combination on the notifying party for gun jumping; and • the imposition of a penalty for making false statements or omitting material facts in
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