SEBI tightens disclosure norms for companies involved in M&A

The Securities and Exchange Board of India (SEBI) has directed listed companies to make accurate and timely disclosures related to mergers and acquisitions (M&A) and asked stock exchanges to be more vigilant. Exchanges have been instructed to monitor share price movements and investor activity before the M&A deal. If any irregularities are found, SEBI can investigate and initiate proceedings against the company, its directors, key personnel, and investors involved in such activities. The enhanced disclosure requirements aim to increase transparency, reduce insider trading risks, and safeguard stakeholder interests. The company must comply with Listing Obligations and Disclosure Requirements (LODR) and file the draft scheme of amalgamation with exchanges for observations before filing M&A applications. In addition, SEBI has also tightened disclosure norms for newly listed companies and mandated certain additional disclosures for listed companies proposing schemes of arrangements.