sebi:MO/4/IMD/09/03
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Facts / Headnote
Exemption granted from complying with Regulation 10 and 12 of the Takeover Regulations for the proposed interse transfer of 34% shares of Hughes Electronics Corporation
Provisions invoked
- s. 19
Regulations
- Reg. 4
- Reg. 10
- Reg. 3(4)
- Reg. 3(5)
- Reg. 3(1)(a)
Holding
SEBI granted exemption to the acquirers from complying with Regulation 10 and 12 of the Takeover Regulations with regard to the proposed interse transfer of 34% shares of Hughes Electronics Corporation, as part of an internal group reorganization among News Corporation subsidiaries.
Full text
exemption from making public announcement and open offer pursuant to Regulation 10 and 12 of the Regulations in respect of internal company transfers. 4.0 In the aforesaid applications, the Acquirers submitted, inter-alia, the following: 4.1 The primary purpose of the internal group transfers is to reorganize the holding of the shares of Hughes Electronics Corporation so that FEG is the ultimate holder of the shares of Hughes Electronics Corporation. 4.2 News Corporation has a direct or indirect controlling interest in each of NPAL, NAI, FEGH and FEG. Consequently, News Corporation and each of NPAL, NAI, FEGH and FEG are group companies within the meaning of the term ‘Group’ as defined in the MRTP Act. 4.3 Pursuant to the transfers, News Corporation will continue to hold and exercise a controlling interest over the shares of Hughes Electronics Corporation and the target company, albeit indirectly through FEG. 4.4 Internal group transfers will not have any adverse effect on shareholders of the target company. Further, because of the change in control and indirect acquisition of the target company, an open offer is being made to the shareholders of the target company who are being given an exit option under the Takeover Regulations for which News Corporation and the persons acting in concert have made a public announcement in accordance with the Regulations. 4.5 The acquirers further stated that there appears to be no specific grounds under
5.2 It is noted that News Corporation through its wholly owned subsidiary NPAL proposes to acquire 34% shareholding interest in the company Hughes Electronics Corporation. It is noted that News Corporation propose to reorganize the shareholding of Hughes Electronics Corporation and the same is to be effective through a series of inter company transfers among the subsidiaries of News Corporation. 5.3 As Hughes Electronics Corporation indirectly holds 55.44% equity shares in the Target Company, News Corporation alongwith persons acting in concert had made a public announcement on July 14, 2003 to the shareholders of the Target company to acquire an aggregate of 20% of equity share capital in accordance with Regulation 10 and 12 of the Regulations. Thus, an exit opportunity has been given to shareholders pursuant to substantial acquisition of shares and change in control of the target company. Further disclosures in respect of reorganization were made in the public announcement and letter of offer issued to the shareholders of HSSL.
5.4 It is noted that News Corporation has direct or indirect controlling interest in the subsidiaries NPAL, NAI, FEGH and FEG through whom the transaction is to be effected. 5.5 It is noted that the objective for reorganizing the shareholding in Hughes Electronics Corporation by News Corporation is stated to be for the purpose of holding the same through FEG in which News Corporation exercises approximately 97% of voting control. 6.0 Taking into consideration the above, the recommendations of the Takeover Panel and the interest of the public shareholders of the target company for whom the News Corporation along with persons acting in concert have made a public announcement on July 14, 2003 to acquire shares in accordance with the requirements of Regulation 10 and 12 of the Regulations, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with sub- regulation (6) of regulation 4 of the Regulations, hereby grant exemption, to the Acquirers from complying with the provisions of Regulation 10 and 12 of the Regulations with regard to the proposed interse transfer of 34% shares of Hughes Electronics Corporation. 7.0 The acquirers are directed that on completion of the acquisitions a report under Regulation 3(4) read with Regulation 3(5) of the Regulations shall be filed with SEBI. A.
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Source: SecMarx — sebi:MO/4/IMD/09/03. 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.