Capital markets regulator SEBI on Monday exempted DKJ Ownership Trust from making an open offer to acquire a 19.85 per cent stake in S Chand and Company from one of the promoters as part of an internal restructuring. According to the SEBI order, the trust will acquire 70 lakh shares from Neerja Jhunjhnuwala, who currently holds a 22.68 per cent stake in the educational publishing company. Following the transfer of shares, Neerja's shareholding will decline to 2.84 per cent, while the trust will hold 19.85 per cent in the company. As per SEBI's Whole Time Member Kamlesh Chandra Varshney, the proposed acquirer is exempted from complying with the requirements of the SAST Regulations, 2011 with respect to the proposed direct acquisition in S Chand and Company Ltd.
The Securities and Exchange Board of India (SEBI) stated that the proposed acquisition was intended to streamline the promoter and promoter group holdings and facilitate succession planning. The regulator noted that the arrangement was non-commercial in nature and will not prejudice the interests of the public shareholders of the company in any manner. SEBI observed that the trust's trustees and beneficiaries were promoters, their immediate relatives or lineal descendants, and there would be no change in control of the company. The transaction was designed to simplify promoter and promoter group ownership while maintaining the overall promoter group holding structure.
According to the SEBI order, the promoter group's aggregate shareholding will remain unchanged at 46.99 per cent following the proposed transaction. The regulator emphasized that the transaction structure ensured no shift in control of the company. SEBI's Whole Time Member Kamlesh Chandra Varshney granted the exemption, stating that the proposed acquirer, DKJ Ownership Trust, is exempted from complying with the requirements of the SAST Regulations, 2011 with respect to the proposed direct acquisition in S Chand and Company Ltd.
SEBI specified that the exemption from the open offer is subject to conditions, including filing a report with SEBI within 21 days of completing the acquisition. The trust must complete the proposed transaction within one year of the order, failing which the exemption will lapse. SEBI recorded that the overall promoter group holding will stay the same with the combined stake remaining at 46.99 per cent. The regulatory approval provides the framework for the internal restructuring while maintaining compliance with SEBI's acquisition regulations and ensuring that public shareholders' interests would not be prejudiced.
