SEBI Exempts Analjit Singh’s Trust From Open Offer Obligation
SEBI’s decision takes into consideration the recommendations of the Takeover Panel.
Market regulator Securities and Exchange Board of India on Monday exempted the Neeman Family Foundation, a trust set up for Analjit Singh and his family members, from making an open offer for public shareholders of Max Financial Services. The foundation has received the exemption with regard to its overall shareholding rising to 30.29 percent in Max Financial Services as part of a rejig among promoter group entities of the company.
A listed entity, Max Financial Services was earlier known as Max India. Analjit Singh is the main promoter of Max group. Under SEBI norms, an entity acquiring more than 5 percent stake in a listed firm would have to make an open offer for that particular entity's public shareholders. The foundation had sought open offer exemption from SEBI and the regulator's latest order has come after taking into consideration the recommendations of the Takeover Panel in this regard.
Granting exemption, SEBI said, "there will be no change in control of the target company (Max Financial) pursuant to the proposed transactions as the change will only be in the manner of holding the shares by the individual promoters".
"Further, there will be no change in the public shareholding in the target company pursuant to the proposed transactions," it added.
The foundation was set up for the benefit of Analjit Singh, his wife Neelu Analjit Singh and their children -- Piya Singh, Veer Singh and Tara Singh Vachani -- as well as their legal heirs and successors, the order said.
It was formed "with a view to facilitate smooth succession and inheritance of the family assets of Analjit Singh and his wife," according to the SEBI order.
As per the application, the foundation would acquire little over eight crore shares and voting rights, constituting 30.29 percent shareholding in Max Financial Services from the promoters. The 30.29 percent shares held by individual promoters and the investment companies of Max Financial would be consolidated in Max Ventures through the proposed transfers and mergers. The exemption has been given with certain conditions.
"As and when circumstances arise where external trustees have a role in the decision making, the trustees of Neeman Family Foundation –- the proposed acquirer/ applicant, should at that point in time approach SEBI under the regulations prevailing at that point in time for exemption, if any," SEBI said.