CII for changes in buyback norm

PRESS TRUST OF INDIA

NEW DELHI, DEC 6: The Confederation of Indian Industry (CII) has urged the government to amend the guidelines on buy back of shares to reduce the cooling period to one year and introduce flexibility in the debt equity ratio. The present rigidity in the guidelines, including 2:1 debt equity ratio, a cooling off period of two years and negotiated deals will make the buy back of shares an unattractive proposition, said CII.

CII has suggested amendment of Section 77-a(5), which does not permit negotiated buy back. A feasible alternative, according to the chamber, will be to permit negotiated deals subject to: a company will not buy-back shares through this route from promoters and through the negotiated deal, a company will permit buy-back at a price which is below market price.

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