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CS Executive · Company Law and Practice · Compromise, Arrangement and Amalgamations - Concepts

Bharat Steels Ltd is a company listed on a recognised stock exchange. Its scheme of arrangement contains a takeover offer for its shares. Which rule governs that takeover offer according to section 230?

For a listed company, a takeover offer forming part of a compromise or arrangement must be made as per the regulations framed by the Securities and Exchange Board. The general prescribed manner applies to other companies, not to listed ones.

  1. AThe offer must follow the regulations framed by the Securities and Exchange BoardCorrect
  2. BThe offer follows the same prescribed manner as for unlisted companies
  3. CThe offer is governed by the Tribunal's discretion alone
  4. DThe offer is governed by the articles of the company alone

Explanation

The proviso to section 230(11) states that in case of listed companies, the takeover offer shall be as per the regulations framed by SEBI. The prescribed manner for other companies therefore does not apply to a listed company. Tribunal discretion or articles cannot replace SEBI regulations.

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