Sebi lets GMR transfer ownership to 5 trusts

Written by ENS Economic Bureau | New Delhi | Updated: Jul 11 2013, 19:13pm hrs
The Securities and Exchange Board of India (Sebi) has allowed GMR Holdings Pvt Ltd (GHPL) to transfer its ownership to five trusts, run by family members as trustees.

The regulators permission was sought to avoid triggering of open offer. Under Sebi norms, an entity buying 25 per cent stake in a listed firm will have to mandatorily make an open offer to buy an additional 26 per cent shares from the public.

As part of the family arrangement... it has been proposed to transfer the shares of G Mallikarjuna Rao and G Varalakshmi in GHPL to GVMR Trust, SBR Trust, GBSRSS Trust, GKKR Trust and the GMR Family Fund Trust. The proposed transfer of shares would be by way of gift to the aforesaid Trusts, said an order by Sebi.

With this transfer, the ownership in GHPL will shift from GM Rao (99.99 per cent) and G Varalakshmi (0.003 per cent) to four trusts that hold 25 per cent each. Apart from G Mallikarjuna Rao and G Varalakshmi, other family members are also trustees of the trusts.

In a related development, Kiran Kumar Grandhi, 38, the youngest son of GM Rao has been appointed corporate chairman of GHPL. Grandhi will be responsible for corporate strategy, finance, and the sports businesses. GM Rao continues to be group chairman.