SEBI TAKEOVER CODE, 2011 & THE PROTECTION OF MINORITYSHAREHOLDERS IN TARGET COMPANY: A STUDY

INTRODUCTION
The entire business world started revolutionising in the twentieth century wherein the economy
of the country was opened by removing the barriers of government controlled laws and regulations.
The concept of globalisation invited foreign investors which in turn widened the economy. One of
the requirements of the progress was to increase the scale of the business in order to stand at par
with the other companies in competition wherein mergers and acquisitions proved to be the best
alternative. The rationale behind the changes in the sector of mergers and acquisition is mainly the
access to the different geographical sectors (63 percent) or increasing the scale of the business (57
percent).2Though this scheme proved to be an asset for all the companies in progressing but it also
became a tool for the wealthy businessmen for exploiting the retail investors. It was to control this
sabotage of the scheme and the investors that the government resolved to establish certain regulations
and laws. The main focus was on to protect the investors and the shareholders of the company who
are directly affected by the affairs of the
company. The Takeover Code, as laid down by the Securities Exchange Board of India for the
listed companies in India, mainly focuses on monitoring acquisitions of shares and voting rights and
control.3 The scheme of mergers, acquisitions and takeovers are being driven by the companies who
are willing to go an extra mile.4
The Takeover Code works in furtherance with the corporate governance principle of “protection of
minority shareholders” which proves to make more sense in a listed company so that the shareholders
are not taken advantage of in the execution of such schemes of takeovers and amalgamations,
irrespective of the fact that they fall into the majority category or the minority category, when a
takeover or an acquisition takes place.