sebi:WTM/PS/85/CFD-DCR-2/MAR/2014
Facts / Headnote
Exemption granted
Provisions invoked
- s. 19
Regulations relied on
- SEBI (SAST) Regulations, 2011 — 3(1)
Holding
SEBI granted exemption to Trilochan Singh Sahney Trust 2 from complying with Regulation 3(1) open offer requirements for its proposed acquisition of 94,38,910 shares (38.95%) of NRB Industrial Bearings Limited from Trust 1 by way of share transfer.
Full text
Page 2 of 5 3. The application dated June 24, 2013 and the subsequent communications from Mr. Trilochan Singh Sahney dated August 09, 2013, August 29, 2013, September 03, 2013, October 10, 2013 and November 19, 2013 in response to the queries of SEBI, state the following: a. The Target Company is a wholly owned subsidiary of NRB Bearings Limited. The Sahney family are the promoters of both the Target Company and NRB Bearings Limited. The shareholding of the Sahney family in NRB Bearings Limited is inter alia held through Trust 1 which holds 3,77,55,640 equity shares (constituting 38.95%) of NRB Bearings Limited. Trust 1 is also designated as one of the promoters of NRB Bearings Limited. b. The 2,42,30,650 equity shares of the Target Company were listed on April 09, 2013, pursuant to the Scheme of Arrangement between NRB Bearings Limited, the Target Company, their respective shareholders and the creditors under Sections 391 to 394 of the Companies Act, 1956. The scheme was approved by Hon'ble High Court of Judicature of Bombay vide order dated August 24, 2012 and filed with the Registrar of Companies, Maharashtra on September 25, 2012. Trust 1 holds 94,38,910 equity shares (constituting 38.95%) in the Target Company. c. As per the family arrangement amongst the members of the promoter family, it has been agreed, that the management of NRB Bearings Limited would primarily be with its managing director, Ms. Harshbeena Sahney Zaveri and is in the day to day control of its managem
Page 3 of 5 f. There will be no change in the shareholding pattern of the promoter/ promoter group of the Target Company.
Page 4 of 5 7. I have seen the restated trust deed of the Trust 1 and note that under the definition of 'Trust Fund' it has been inter alia stated that equity shares of Target Company will be part of the Trust 1 until distribution of the same to Trust 2. Further, I note that the Acquirer is a private family trust settled by Mr. Trilochan Singh Sahney, the Settlor/ Trustee of the Transferor. The Transferor is one of the promoter of the Target Company and falls within the definition of 'promoter group' under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and the Acquirer would become part of the promoter group pursuant to the proposed acquisition as the Trustees and the beneficiaries of the Acquirer are family members of Mr. Trilochan Singh Sahney, a promoter of the Target Company. Therefore, the Acquirer would be regarded as a person deemed to be acting in concert with the promoters of the Target company in terms of Regulation 2(1)(q) of the Takeover Regulations. I note that the Acquirer does not hold any shares in the Target Company prior to the proposed acquisition. Pursuant to the proposed transaction, the shareholding of the Acquirer would increase from nil to 38.95% in the Target company. Accordingly, the Acquirer would be under an obligation to make an open offer as required under 3(1) of the Takeover Regulations unless exempted by SEBI.
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Source: SecMarx — sebi:WTM/PS/85/CFD-DCR-2/MAR/2014. 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.