sebi:CO/492/TO/02/2003

SEBI · SEBI · G N Bajpai, Chairman, Securities & Exchange Board of India

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Exemption granted - internal restructuring within ING Group held not to attract Chapter III of the Takeover Regulations

Regulations

• Reg. 4
• Reg. 11
• Reg. 10

Holding

The Chairman of SEBI held that the proposed internal restructuring within the ING Group, whereby BBL would transfer its entire shareholding of BBLMH to the Acquirer (ING Bank N.V.), will not attract the provisions of Chapter III of the Takeover Regulations.

Full text

2 3.1 The ING Group is a global financial institution of Dutch origin. The ING Group, which comprises a conglomerate of companies, offers banking, insurance and asset management services in approx. 65 countries around the world. ING Groep N.V. is the ultimate holding company of the ING Group. 3.2 ING Groep N.V. presently has beneficial interest in 43.99% of the issued equity share capital of the Target company through the instrumentality of four ING Group companies viz. (a) Acquirer – a wholly owned subsidiary of ING Groep N V. (b) Banque Bruxelles Lambert S A (BBL) – a wholly owned subsidiary of the Acquirer. (c) BBLMH – a wholly owned subsidiary of BBL, and (d) BBLMI – a wholly owned subsidiary of BBLMH. The diagrammatic representation of the present 43.99% shareholding of the ING Group in the Target company is as given below : ING Groep N. V. 100% ING Bank N.V.(Acquirer) 99% Banque Bruxelles Lambert S.A.(BBL) 100% BBL Mauritius Holdings (BBLMH) 100% BBL Mauritius Investments(BBLMI) 9.79% 34.20% The Vysya Bank Ltd(Target ompany)

3 3.3 The registered shareholders of the Target company in respect of the aforesaid 43.99% shareholding of the ING Group are BBLMH and BBLMI respectively. 3.4 BBLMH presently holds 77,49,701 shares constituting 34.20% of the issued equity share capital of the Target company and BBLMI presently holds 22, 18,419 shares constituting 9.79% of the issued equity share capital of the Target company. 3.5 As part of an internal restructuring within the ING Group in furtherance of requirements of the Belgian regulatory authorities, it is proposed to restructure the shareholding pattern of the ING Group in the Target company such that BBLMH is held directly by the Acquirer. For this purpose, it is proposed that BBL will transfer its entire shareholding of BBLMH to the Acquirer. The diagrammatic representation of the 43.99% shareholding of the ING Group in the Target company post the internal restructuring will be as follows : ING Groep N. V. 100% ING Bank N.V.(Acquirer) 100% BBL Mauritius Holdings(BBLMH) 100% BBLMauritiusInvestments(BBLMI) 9.79% 34.20% The Vysya Bank Ltd(Target company) 3.6 It is apparent from the aforesaid that notwithstanding the proposed acquisition by the Acquirer of the entire paid up share capital of BBLMH

4 (which in turn directly and through its subsidiary BBLMI, holds shares in the Target company being a listed Indian company): a) The ING Group will continue to be the ultimate beneficial shareholder of the entire aforesaid 43.99% shareholding in the Target company and there will be no change in the percentage of shareholding of the ING Group in the Target company and b) BBLMH shall continue to be the registered and beneficial shareholder of 34.20% of the paid up equity share capital of the Target company and BBLMI shall continue to be the registered and beneficial shareholder of 9.79% of the paid up equity share capital of the Target company. 3.7 The proposed acquisition does not involve any change whatsoever in the ultimate beneficial ownership of the shares of the target company held by the ING Group. 3.8 The proposed acquisition only involves an ING intra-group transfer of the shares of an ING Group Company (viz. the Acquirer) – without effecting any change whatsoever in the shareholding, control or management of the Target company. 3.9 The Acquirer already indirectly holds the entire shareholding of BBLMH, since BBL is itself a wholly-owned subsidiary of the Acquirer. 3.10 The proposed transfer will not in any manner prejudicially affect the shareholders of the Target company. 3.11 The ING Group also intends to purchase (through the instrumentally of its group companies) an additional 5% of the issued equity share capital of

Source: SecMarx — sebi:CO/492/TO/02/2003. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.