Sebi did not exempt family trust from open offer requirement: Max group firms

Two Max Group companies today informed stock exchanges that Sebi has not provided exemption to Neeman Family Foundation from making open offers to respective shareholders post rejig of promoters' holdings.

On Tuesday, Sebi rejected request of Neeman Family Foundation Trust -- a trust of Max Group promoter Analjit Singh -- to exempt it from making open offers for the two companies' shareholders.

In separate filings, Max India and Max Ventures and Industries Ltd said that Analjit Singh and family continue to own and control the entire shareholding held by the promoter entities.

This is even after proposed consolidation and the benefit of the exemption granted to Max Financial Services should have been made available with respect to the two companies, as per the filings.

The two companies submitted a communication from Max Ventures Investment Holdings Pvt Ltd, a promoter group entity, as per the filings.

The promoters also wish to clarify that Sebi has not mandated an open offer anywhere in its order, the filings said.

"... if Neeman were to go ahead with the proposed acquisition which breaches the thresholds specified in the takeover regulations, only then an open offer requirement would be triggered," they added.

Following a proposed rejig of shareholdings in the group entities, the trust will have over 25 per cent stake each in Max Financial Services, and Max Ventures and Industries. This will trigger the requirement of open offer under Sebi norms.

Sebi's takeover regulations permit open offer exemptions for promoter entities in cases of acquisitions pursuant to transfer of shares amongst qualifying persons being promoters, subject to certain conditions.

Neeman Family Foundation Trust submitted an application to the markets regulator in March 2017, seeking exemption from making open offers.

In separate but similarly-worded orders, Sebi had said that it has not found any merit in the application seeking exemption under the takeover regulations with respect to the proposed acquisitions as the trust does not meet the stipulated mandate of disclosure as a 'promoter' for three years prior to the proposed acquisition.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)