In its reply, Diageo explained to Sebi why it had sole control over USL since July 2013 for which it had already made an open offer.
“In my view, in a case where one of the two promoters renounces his control over the target company such that the entire control of the company vests in the hands of the lone promoter who continues, it cannot be said that there is a ‘change in control’ as the public shareholders are familiar with both the promoters being in control of the company and have accepted the same. In this case, the acquisition of control under regulation 4 of the substantial acquisition of shares and takeovers regulations by the noticees has been notified in the first open offer itself.
Likewise the details of the voting arrangements and veto rights, which were part of the shareholder’s agreement, were also disclosed. Hence, I do not find that the alleged trigger of open offer arising out of cessation of joint control is substantiated,” Mahaligam said.