Sebi exempts family trusts linked to Minda Industries’ promoters from open offer requirement

By: |
October 19, 2020 5:58 PM

The proposed direct and indirect acquisitions would be a non-commercial transaction which would not affect the interests of public shareholders of the companies in any manner, Sebi said in an order on Friday.

NK Minda Family Investment Trust and Suman Minda Family Investment Trust are private family trusts of promoters and promoter group of Minda Industries.NK Minda Family Investment Trust and Suman Minda Family Investment Trust are private family trusts of promoters and promoter group of Minda Industries.

Markets regulator Sebi on Friday exempted NK Minda Family Investment Trust and Suman Minda Family Investment Trust from the obligation of making an open offer after their proposed acquisition of shares in Minda Industries.

NK Minda Family Investment Trust and Suman Minda Family Investment Trust are private family trusts of promoters and promoter group of Minda Industries.

Granting exemption, Sebi said the proposed acquisition of shares is in “furtherance to an internal reorganisation within the promoter’s family and is intended to streamline succession and promote welfare of the promoter’s family”.

The proposed direct and indirect acquisitions would be a non-commercial transaction which would not affect the interests of public shareholders of the companies in any manner, Sebi said in an order on Friday.

The order comes after Sebi received an application from the two family trusts seeking exemption from the applicability of SAST (Substantial Acquisition of Shares and Takeovers) Regulations in the matter of proposed acquisition of shares in Minda Industries.

Minda Investment Ltd (MIL) and Singhal Fincap Ltd (SFL), together referred to as holding companies, are part of the promoter group of Minda Industries and currently hold 24.35 per cent and 2.84 per cent stakes, respectively, in the company.

Nirmal Kumar Minda and Suman Minda are promoters of Minda Industries.

Under the proposed transaction, NK Minda Family Investment Trust would acquire 24.93 per cent shares of Minda Industries from Nirmal Kumar Minda, while Suman Minda Family Investment Trust would pick up 16.61 per cent shares of the company from Suman Minda.

“Further, the shares of the target company are also being indirectly acquired by the acquirer trusts through transfer of shares of holding companies (MIL and SFL) from Nirmal Kumar Minda and Suman Minda (post the intended transfer of shares of MIL and SFL to her from her daughters) to the acquirer trusts,” the order noted.

The direct and indirect acquisition of shares of Minda Industries by the trusts would trigger the applicability of the Takeover Regulations and accordingly exemption was sought from the regulator.

In its order, Sebi said there will be no change in control of the firm pursuant to the proposed acquisition.

The pre acquisition and post acquisition shareholding of the promoters and promoter group in the company will remain the same. Besides, there will be no change in the public shareholding of the company.

Accordingly, the regulator has granted “exemption to the proposed acquirers, viz. NK Minda Family Investment Trust and Suman Minda Family Investment Trust, from complying with the requirements… of the Takeover Regulations 2011 with respect to the proposed direct and indirect acquisitions in the target company, viz. Minda Industries”.

The exemption has been granted subject to certain conditions, including compliance with the provisions of Companies Act and other norms.

It, further, said the exemption granted is limited to the requirements of making open offer under the Takeover Regulations and will not be construed as exemption from the disclosure requirements under compliance with the PIT (Prohibition of Insider Trading) norms and LODR (Listing Obligations and Disclosure Requirements) Regulations.

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