SEBI TAKEOVER CODE: AMBIGUITIES, EXPLOITATIONS AND REFORMS

AUTHOR – AJINKYA RAJPUT & JANHAVI JOSHI, STUDENTS AT INDIAN LAW SOCIETY (ILS)

BEST CITATION – AJINKYA RAJPUT & JANHAVI JOSHI, SEBI TAKEOVER CODE: AMBIGUITIES, EXPLOITATIONS AND REFORMS, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (11) OF 2025, PG. 75-81, APIS – 3920 – 0001 & ISSN – 2583-2344.

Abstract

The SEBI Takeover Code 2011 governs substantial acquisitions and takeovers in India, aiming to ensure transparency, fairness, and minority shareholder protection. However, ambiguities in its provisions—particularly the definition of “control”—have led to regulatory loopholes and exploitation in high-profile M&A deals. This article examines key ambiguities in the Code, such as the subjective interpretation of control (including veto rights and indirect acquisitions), the creeping acquisition limit, and the challenges in enforcing provisions related to Persons Acting in Concert (PACs). Through case studies like Subhkam Ventures, Future-Reliance, Cairn-Vedanta, and NDTV-Adani, the article highlights how acquirers bypass open offer obligations by structuring transactions through indirect holdings, asset transfers, or layered ownership. The analysis also explores SEBI’s regulatory evolution, explaining how the 2020 amendments addressed some gaps still some critical issues remain, such as weak minority shareholder safeguards and the lack of clarity on new-age company takeovers. The article concludes with recommendations for reform, including stricter definitions of control, enhanced PAC oversight, and robust mechanisms for indirect acquisitions to align the Code with its legislative intent of market integrity and investor protection