Mr. C.Achuthan, the chairman of the Security and Exchange Board of India(Sebi) takeover code committee has said that changes such as a hike in 15% trigger limit and a 100% open offer are being considered. He said that if substantial changes are required in the present code, then the committee might consider rewriting the code altogether.

The committee was set up to review the takeover code as a whole, as the present code required some major changes. The takeover code lacks clarity is many areas. The committee is re-examining some the existing provisions that lack clarity and have caused a great deal of uncertainty. The committee hopes to complete the review work by March 31 next year.

Section 10, 11 and 12 are the core sections of the Takeover Code. Section 10 talks about the initial acquisition. Eleven talks about the consolidation and 12 is about the control. Mr. Achuthan said that section 1 is fairly clear, however section11 and 12, is unclear, especially regarding creeping acquisition and acquisition of control.

SEBI has had to make significant changes to the Takeover Code during its fairly short life span. The first Takeover Code, promulgated by SEBI in 1994, lasted all of 3 years. It was replaced by the existing Takeover Code of 1997, which too has been subjected to periodic amendments (nearly each year since 2002). Consequently, the code has acquired a great amount of complexity in its provisions. Due to the lack of clarity in the provisions, a large number of orders and informal rulings of SEBI, appeals dealt with by the Securities and Appellate Tribunal (SAT) that have gone all the way up to the Supreme Court.