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Issues in Takeover code
Title: Automatic Exemption in terms of Reg 3
Suggestion: The listed company is having 71 % promoters holding & the promoters further wants to purchase 3.5 % from open market making its holding 74.5% in the financial year 2011-12.

2) Then further the company will go for preferential issue in 2011-12 & will issue/allot 10,00,000 shares each to strategic investor & promoter as well which will result the dilution of promoters holding and bring to it again 72 %.

In other words the company will make preferential issue of 5.2 % of post issued capital to each group i.e promoter & public/ strategic investor thereby the shareholding of Promoters get diluted and will come down to 72%.
3) Will SEBI Substantial Acquisition of Shares & Takeover regulation, Reg.11(2) to be complied by the promoters, i.e. open offer/public announcement?

4) Can the Company without complying with the open offer/public announcement issue/allot that amount of shares to the Promoters?

Please make it clear clarify/suggest with proper provisions & references.