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is Rs. 350 per share, but market price is only Rs. 120 per share, the acquirer can comfortably make PA to acquire such shares a Rs. 180 per share. 2. Acquirer intends to expand his business empire. 3. Acquiring an existing business entity is a short cut to expansion/ diversification, instead of putting efforts for establishment of a new equivalent business entity. And, a good aspect of acquiring an existing business entity is that the return on investment (ROI) comes immediately. However, Takeover Code is applicable to both types of Takeovers-friendly as well as hostile. TWO BROAD OBJECTIVES OF TAKEOVER CODE 1) To provide transparency in bulk acquisition of shares of the target listed company. 8 2) To provide reasonable profit, to the small shareholders of target company while the management and control of target company is about to get changed. PENALTY UNDER SECTION 15H OF SEBI ACT, 1992 EX TAKE OF SECTION 15H OF SEBI ACT, 1992 If an acquirer fails to comply with SEBI Takeover Code, 1997- he shall be liable to a penalty OF Rs. 25 crore or 3 times of the amount of profit made out of such failure, whichever is HIGHER. (Literal interpretation: Fine is NOT up to Rs. 25 crore, rather Rs. 25 crore is minimum fine.) But, in many cases, it has been held by SEBI that it may impose a lesser fine than that specified in the Section 15H, if situation demands imposition of such lesser fine. 2 (1) disclose the aggregate of his shareholding in the boxy corporate before he acquires shares of that body corporate; or any Public annoucent (1) make a PA to acquire shares at a minimum price, or (1) make a public offer by sending letter of offer to the shareholders of the concerned target company; or (iv) make payment of consideration to the shareholders who sold their shares pursuant to letter of offer; SECTION 24 OF SEBI ACT, 1992 he shall be liable to a penalty of Rs. 25 crore or 3 times the amount of profit made out of such failure, whichever is higher. (1) Without prejudice to any award of penalty by the Adjudicating Officer under SEBI Act, 1992 if any person contravenes, or attempts to contravene or abets the contravention of the provisions of this Act or of any rules or regulations made 4. [AMIT KUMAR MAHTO 8692875459]