The buyback of 113 million equity shares by Infosys for US$2 billion required clearances of markets regulators in the US, UK and France in addition to India said a partner at AZB & Partners that advised the country’s second-largest IT company.
“Given that Infosys is listed on New York Stock Exchange and Euronext London and Paris, apart from having to comply with the buyback regulations of Securities and Exchange Board of India (SEBI), compliances under laws of various countries had to be ensured,” said AZB partner Sugandha Asthana.
“A big challenge was to harmonize the entire process even though there were conflicting requirements under laws of various jurisdictions. Application for ‘no-action” had to be made to the [US] Securities and Exchange Commission [SEC] to seek certain exemptions. The uncertainties around the legal regime on ADRs [American depositary receipt] also had to be dealt with, in consultation with regulators.”
The buyback was approved by the company board in mid-August 2017 and completed in end of December. Post-extinguishment, Infosys had 2.18 billion equity shares with the promoter group in possession of 12.9% of the shares. This was Infosys’ first buyback scheme since its founding in 1981.
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