ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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On Hostile Takeovers

Your editorial entitled 'Market for Corporate Control' (October 14) raises very important issues regarding the much vaunted takeover code of the SEBI. Permitting hostile takeovers has created problems in the Indian corporate sector, hitting at the very basis of good corporate governance. Most predators are more interested in acquiring companies which have shown current profit and have bright future prospects. Predators come in different shapes and sizes, often in dinner jackets, saying all kinds of good words.

One of the victims of such hostile takeover was Raasi Cements which fell victim to the designs of the much bigger and more resourceful India Cements, creating a totally unsavoury precedence. Raasi Cements, in fact, was a good company but fell an easy target to the designs of India Cements – with the help of financial institutions. India Cements gulped the company almost as a constrictor.

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