The Securities and Exchange Board of India (Sebi) has exempted four family trusts linked to promoters from making open offers to shareholders of three companies - Torrent Power, Torrent Pharmaceuticals and Gujarat Lease Financing - following their proposed indirect share acquisition in these firms.
Regulator Sebi on Tuesday exempted four family trusts linked to promoters from making open offers to the shareholders of three companies -- Torrent Power, Torrent Pharmaceuticals and Gujarat Lease Financing -- following their proposed indirect share acquisition in these firms.
The orders came after four Mehta Family Trusts filed applications with the regulator in July 2023, and sought exemption from certain provisions of takeover regulations.
In order to facilitate succession planning, Sudhir Uttamlal Mehta and Samir Uttamlal Mehta created four trusts to streamline the family's shareholding in Torrent Investments Private Limited (TIPL).
Under the proposed acquisitions, four acquirer trusts intended to acquire interest in the target companies -- Torrent Power, Torrent Pharmaceuticals and Gujarat Lease Financing -- indirectly from TIPL, one of the promoters of these firms, according to three separate orders by the Securities and Exchange Board of India (Sebi).
The acquirer trusts plans to acquire 6.37 lakh shares of TIPL, which holds a 53.56 per cent stake in the power firm, by way of gift. Similarly, the trusts intended to acquire 6.37 lakh shares of TIPL, which owns 71.25 per cent stake in Torrent Pharmaceuticals. Also, the trusts plan to acquire 6.37 stocks of TIPL, which has a 29.55 per cent stake in Gujarat Lease Financing.
Granting an exemption from the open offer, Sebi noted that the proposed acquisitions are intended to streamline succession and promote the welfare of the Mehta Family. The proposed acquisitions will be non-commercial transactions that will not affect or prejudice the interests of the public shareholders of the three companies.
Also, it noted that the proposed transactions would not lead to any change in the control of the target companies and the pre–acquisition and post–acquisition shareholding of the promoters in the target companies will remain the same.
Accordingly, Sebi has granted an exemption to the acquirer trusts -- Mehta Family Trust 1, Mehta Family Trust 2, Mehta Family Trust 3, and Mehta Family Trust 4, from required to comply with the requirements of the Takeover Regulations 2011 with respect to the proposed indirect acquisition in the target companies-- Torrent Power, Torrent Pharmaceuticals and Gujarat Lease Financing by way of proposed transactions.
Sebi further said that the exemption granted is limited to the requirements of making an open offer under the Takeover Regulations, 2011, and will not be construed as an exemption from the disclosure requirements.