There is a pervasive presumption regarding the Takeover Code in India (Substantial Acquisition of Shares and Takeovers Regulations, 2011) that it is biassed towards the incumbent management. It is incorrectly said that the Takeover Code is there to prevent hostile takeovers in companies. However, on an inspection of the provisions, it is revealed that it is not so.
The Takeover Code merely provides a regulatory framework for the adherence of proper procedure for both- the acquirer and the target company. Only a fairground is provided by the Takeover Code so that the acquirer can attempt the takeover and the target company can defend itself, all while trying to maintain the best interests of the company.
At this stage, possible defences are studied to peg any biases in their applicability or inapplicability in India. It is also revealed that the reasons for sparse takeover activity are beyond the legal and the regulatory frameworks and can be found within the business environment and the shareholding pattern in the country. Lastly, recent amendments are studied to determine the latest stance of the legal and regulatory framework towards hostile takeovers.