The creeping acquisition limit has assumed critical significance for corporate India, against the background of hostile takeover attempts and cornering of shares. "We could examine whether there could be a lock-in for those crossing the 5 per cent limit to ensure that promoters are actually investing in companies and not just seeking to trade in the shares,'' Mr OP Gahrotra, senior executive director, Sebi, told The Financial Express.

Mr Gahrotra said there was a strong demand from Indian companies to have ha re-look at the 5 per cent creeping acquisitions limit to prevent them from being raided by predators. One option is to keep the existing 5 per cent limit as it is, and, if promoters cross it, they may e asked to adhere to a lock-in for those shares for certain period of time, say one, two or three years. This will prevent promoters from merely turning nto traders promoters could buy shares in the name of consolidation of their holdings and then sell them. "If they want to consolidate their holding, why should they be selling?

A lock-in could ensure that they stay in the company," Mr Gahrotra said.While this would be discussed in detail at the panel meeting, doing away with the 5 per cent limit subject to a lock-in may also be deliberated upon.

The basic idea is to ensure that promoters do not end up playing the market in their companies' shares under the garb of consolidation.

The other crucial issue is that of the role of financial institutions in the takeover cases. The Sebi panel would, on Tuesday, meet all the investment institutions including UTI, LIC and GIC to examine the issue and what they felt about it.

"We would like to understand what their views are on the issue. The institutions have begun going in for greater activism and there is a need, therefore, to see whether they are merely investors or playing a more important role in companies," Mr Gahrotra pointed out.

Sebi's contention is that if they are seen to play a more active role in company managements, then they should no longer be treated differently and must be made to fall under the code and make open offers like any other acquirer. The takeover panel meeting has assumed critical significance coming as it does against the backdrop of the Bajoria-Bombay Dyeing face-off and the AH Dalmia group hostile bid for GESCO Corporation.