NEW DELHI: Market regulator Sebi Wednesday exempted two private family trusts related to the promoter group of Navkar Corporation Limited from the obligation of making an open offer following its proposed acquisition of 31.4 per cent stake in the firm.
Nemichand Mehta Family Trust and Shailaja Mehta Family Trust had sought exemption from the obligation of making open offer post-acquisition of certain number of shares in Navkar Corporation.
Under the proposed acquisition, both trusts would be acquiring a total of 31.4 per cent equity shares of Navkar from the company's promoter Nemichand Mehta and Shailaja Mehta who are also trustees of both Mehta Family trusts.
The proposal has been made following a private family arrangement to provide for family succession and welfare of Mehta Family.
In an order, Sebi has granted exemption to both the trusts from making the open offer, saying the proposed acquisition would take place pursuant to a private family arrangement intended for succession and welfare of the promoter Mehta Family.
Besides, the proposed acquisition will not affect the interest of the public shareholders and there will be no change in control of the company pursuant to the proposed acquisition, noted Sebi.
According to the SAST (Substantial Acquisition of Shares and Takeovers) Regulations, an entity buying 25 per cent stake in a listed firm needs to mandatorily make an open offer to buy an additional 26 per cent shares from the public shareholders The regulator has laid certain conditions while providing exemptions, including that the proposed acquisition should be in accordance with the relevant provisions of the Companies Act and other applicable laws.
"On completion of the proposed acquisition, the acquirers (trusts) shall file a report with Sebi within a period of 21 days from the date of such acquisition, as provided in the Takeover Regulations," said whole time member G Mahalingam.