"The FIs should offer funds to the existing promoters of the target company to purchase shares for protecting their interests," the PHD Chamber of Commerce and Industry (PHDCCI) said in a statement here.

In a discussion paper on the proposed modifications in the takeover code, the chamber said a code of conduct for FIs in the matter of takeovers should be evolved with a thrust on ensuring the most attractive price to the shareholders.

FIs being major shareholders, could help tilt the balance through their own holdings in any takeover bid, PHDCCI said. Since long-term interests of investors were best served by managements capable of sustaining efficiency, shareholders needed an opportunity to assess the capabilities of competent managements.

Hence the takeover code should stipulate disclosure of track record of competing managementsand their future plans for the company to be taken over, PHDCCI said.

The chamber said in the case of first generation promoters, a cooling period of at least five to 10 years should be provided so that they were not acquired by large corporate `predators.'