Can SEBI grant exemption for Open Offer to Acquirer under Takeover Regulations?

In terms of Regulation 11(5) of the Takeover Regulations, SEBI has power to grant exemption to the Proposed Acquirer from complying with the requirements of Regulations 3, 4 and 5 of the Takeover Regulations.

The Application was submitted by Mr. Amit Anand in respect of the proposed acquisitions of shares and voting rights in the Target Company i.e. APIS India Limited. The proposed acquisitions which are to be made by Anand Drishti Trust i.e. the Proposed Acquirer, will attract the provisions of Regulations 3, 4 and 5 of the Takeover Regulations 2011.

(i) Pursuant to the proposed acquisitions, the Proposed Acquirer will hold an aggregate of 74.72% of the paid up equity capital in the Target Company on account of the direct and indirect acquisitions in such Company.

(ii) The objective of the proposed acquisitions is to streamline succession and promote welfare of the Promoter family.

(iii) There will be no change in control of the Target Company pursuant to the proposed acquisition.

(iv) The pre–acquisition and post–acquisition shareholding of the Promoters in the Target Company will remain the same (except that of the transferors and the transferees in the Direct Acquisition).

(v) There will also be no change in the public shareholding of the Target Company.

(vi) The Target Company shall continue to be in compliance with the minimum public shareholding requirements under the Securities Contracts Regulation Rules, 1957 (“SCRR”) and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In exercise of the powers conferred to SEBI under Section 19 read with Section 11(1) and Section 11(2)(h) of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and Regulation 11(5) of the Takeover Regulations, SEBI granted grant exemption to the Proposed Acquirer, viz. Anand Drishti Trust, from complying with the requirements of Regulations 3, 4 and 5 of the Takeover Regulations with respect to the proposed acquisitions in the Target Company, viz. APIS India Limited, by way of proposed transactions as mentioned in the Application.

The exemption so granted is subject to the following conditions:

(i) The proposed acquisition shall be in accordance with the relevant provisions of the Companies Act, 2013 and other applicable laws.

(ii) On completion of the proposed acquisition, the Proposed Acquirer shall file a report with SEBI within a period of 21 days from the date of such acquisition, as provided in the Takeover Regulations.

(iii) The statements/averments made or facts and figures mentioned in the Application and other submissions by the Proposed Acquirer are true and correct.

(iv) The Proposed Acquirer shall ensure compliance with the statements, disclosures and undertakings made in the Application. The Proposed Acquirer shall also ensure compliance with the provisions of the SEBI Circular dated December 22, 2017.

(v) The Proposed Acquirer shall also ensure that the covenants in the Trust Deeds are not contrary to the above conditions and undertaking provided by the transferors. In such case, the Trust Deeds shall be suitably modified and expeditiously reported to SEBI.

(vi) The Proposed Acquirer shall at all points in time, ensure that Directors appointed in the Promoter Companies, viz. ANPPL and MHPL, are either the individual Promoters or their immediate relatives or lineal descendants.

The exemption granted is limited to the requirements of making open offer under the Takeover Regulations and shall not be construed as exemption from the disclosure requirements under Chapter V of the aforesaid Regulations; compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015; Listing Agreement/SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 or any other applicable Acts, Rules and Regulations.

(Link : https://www.sebi.gov.in/enforcement/orders/oct-2019/exemption-order-under-regulation-11-of-sebi-sast-regulations-2011-in-the-matter-of-apis-india-limited_44580.html)

 

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