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As mergers and acquisitions become more complex and multi-layered, requiring multiple regulatory clearances and compliances, the understanding of the C word has become more crucial than ever
Differences between control as seen byCCI and Sebi: | CCI approaches it from business sense, Sebi looks at it from the stock market perspective > ACCOUNTING STANDARD 21 * | CCI looks through multiple | The ownership, directly or indirectly through subsidiary(ies), of more layers. Sebi usually stops at than half of the voting power of an enterprise; or one layer above for | Control of the composition of the board of directors to obtain determining voting rights. economic benefits from its activities But, control is decided on a case-to-case basis > COMPANIES ACT | CCI sees convertible No direct definition. But defines holding company and subsidiary. securities as shares from day Accordingly, a company shall be deemed to be a subsidiary of another one, Sebi sees those taking if, and only if, effect on the day of | The other controls the composition of its board of directors; conversion | Holds more than half in nominal value of its equity share capital; | The first-mentioned company is a subsidiary of any company of which | CCI says control can be exercised either jointly or its holding company is a subsidiary singly, Sebi sees control > SEBI TAKEOVER REGULATIONS being exercised individually or in concert, directly or Includes the right to appoint a majority of the directors, or to control the indirectly management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly. This could be by | Sebi rules apply only to listed virtue of their shareholding or management rights or shareholders firms. CCI covers both listed agreements or voting agreements, or in any other manner and unlisted companies Includes controlling the affairs or management by: | One or more enterprises, either jointly or singly, over another enterprise or group; | One or more groups, jointly or singly, over another group or enterprise
COMPETITION ACT
US
Takeovers in the United States are governed by a combination of state laws and case laws in the Delaware court of Chancery
Australia
An entity controls another if it has the capacity to determine the decisions about financial & operating policies of the other