The Securities and Exchange Board of India (Sebi) has granted the Mehta Family Trust relief from the open offer requirement linked to their indirect acquisition of shares in Saurashtra Cement Ltd. According to reports from The Economic Times, NDTV Profit, ETLegalWorld, and ET Now, Sebi's Whole Time Member Kamlesh Chandra Varshney granted the exemption after observing that the transaction is part of an internal reorganisation of the promoter family aimed at streamlining succession planning and consolidating family holdings. As per ET Now, Sebi's Whole Time Member Kamlesh Chandra Varshney stated in the official order that he 'hereby grant exemption to the proposed acquirer, viz., Mehta Family Trust, from complying with the requirements of regulation 3(2), and regulation 5 of the SAST Regulations, 2011 with respect to the proposed indirect acquisition in the target company, viz., Saurashtra Cement Ltd, by way of proposed transaction'. The exemption is valid for one year from the date of the order, within which the proposed acquirers must complete the acquisition; failing which it will lapse and cease to exist.
The proposed transaction involves Jay Mahendra Mehta transferring his 49.99 per cent stake in Galaxy Technologies Pvt Ltd to the trust, while Juhi Chawla Mehta will also transfer her 50.04 per cent profit sharing/voting rights in Omna Enterprises LLP to the trust. As reported by The Economic Times, NDTV Profit, ETLegalWorld, and ET Now, Galaxy and Omna, a part of the promoter and promoter group of Saurashtra Cement Ltd, together hold a 24.04 per cent stake in the company. The Mehta Family Trust, established in 2019, has Juhi Chawla and her husband, industrialist Jay Mehta, as trustees. Sebi noted that the proposed indirect acquisition would ordinarily trigger an open offer under the Takeover norms, but the exemption was granted due to the internal reorganisation nature of the transaction.
According to the order, there will be no change in control of Saurashtra Cement Ltd pursuant to the proposed acquisition. As reported by The Economic Times, NDTV Profit, ETLegalWorld, and ET Now, Sebi noted that the acquisition is non-commercial in nature and would not prejudice the interests of public shareholders. The company's promoter group will continue to hold 66.62 per cent while public shareholding will remain at 33.38 per cent. The regulator also noted that the trust comprises only promoters, their immediate relatives and lineal descendants, making it a mirror image of the existing promoter holding structure.
The exemption is subject to specific conditions, including the filing of a report within 21 days from the date of acquisition. According to The Economic Times, NDTV Profit, ETLegalWorld, and ET Now, Sebi clarified that the exemption is limited to open offer requirements and does not waive other compliance obligations under applicable regulations. The exemption from open offer obligations is valid for one year from the date of the order, within which the proposed acquirers must complete the acquisition; failing which it will lapse and cease to exist.
