According to Takeover Code Rule 5, what is the restriction on acquiring voting rights?

Under Takeover Code Rule 5, acquiring more than 30% of the voting rights in a target company is subject to specific restrictions. This rule is designed to protect shareholders and ensure a fair and transparent process during takeovers. Therefore, any acquisition that exceeds the 30% threshold without the prior consent of the regulatory authority is deemed restricted.

This limit is significant in the context of corporate governance, as it may trigger a mandatory bid obligation, requiring the acquiring party to make an offer to all shareholders of the target company. The rationale behind this is to ensure that any substantial shareholder gains control in a manner that offers existing shareholders an opportunity to exit if they so choose.

The other options present different scenarios that do not align with the regulations outlined in the Takeover Code. For example, prohibiting acquisitions over 20%, as stated in the first option, is too restrictive compared to the actual provisions of the Code, which allow acquisitions up to 30% without restrictions. Additionally, suggesting that acquisitions over 50% are simply allowed does not account for the conditions and regulatory oversight involved in such a significant increase in voting rights.