Speaking at the Indian Chamber of Commerce on corporate restructuring, Shroff said "These limits must be rolled back; otherwise, the code will lose its teeth" and defeat the underlying objective of the code of enhancing shareholder value.

The trigger limit for making a public offer was increased with effect from October 28,1998 in a bearish phase. In a bull phase, there was a strong case for reversing this to the original level of 10 per cent, Shroff pointed out.Similarly, the creeping acquisition limit of 5 per cent was also not benefiting shareholders, as many promoters were able to silently up their stakes and the market had no inkling of the development, he added.

He hoped that the second review of the code by the Bhagwati panel, which was now overdue, would address issues relating to tightening the definition of promoters in the code and the misuse of the discretionary rights of promoters for exemption from making a public offer.

Among the statutory exemptions allowed under the code, Shroff pointed out that preferential offers was the "most infamous" route preferred by promoters to avoid making a public offer to the minority shareholders.Shroff maintained that there was a pressing need to bring the Companies Act provision relating to buyback of shares in line with the provisions of the Takeover Code to ensure that the basic objectives of corporate restructuring were not defeated.

He felt that the stipulation of a minimum public offer of 20 per cent had served a limited purpose. The code would really benefit shareholders only if the acquirer agreed to buy the entire public shareholding once the trigger limit was reached, he noted.pEarlier, in his welcome address, president KK Bangur stressed the need for making guidelines on share buyback less cumbersome. He added that the requirement of 2:1 debt-equity ratio post buyback and the ban on creeping acquisition during the buyback process were acting as deterrents to corporate restructuring.

He suggested that the takeover code should be suitably modified so that "unscrupulous acquiring is avoided." He added that the creeping acquisition facility should be allowed only to those having a minimum 15 per cent stake and management control of the company.