28 July, 2021

Barbarians At The Gate?

The Bhagwati Committee draft on takeovers opens the floodgates for hostile acquisitions

Barbarians At The Gate?

MAKING the impossible, possible. That's what the draft code for takeovers presented by the Bhagwati Committee on August 28 has just done. Obstructed by political pressures, archaic guidelines, lack of transparency and general disapproval of takeovers among the public, hostile acquisitions were rarely successful, apart from being a nightmare for both parties, where underhand deals and bullying tactics were the norm rather than the exception. The draft code—scheduled to be notified by end-December—aims to change all that. 

Based on the principles of transparency, equality and opportunity for all shareholders, the draft code has been widely acclaimed. "It has been very well drafted," says Atul Chopra, managing director, projects, Brisk Capital Market Services. And a first glance at the draft was enough to convince analysts that the era of hostile corporate takeovers—the cause behind many corporate dramas in the West—was just a notification away.

 At the same time, Justice P.N. Bhagwati has managed to do what no transnational...

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