Max Group's Promoters issued a clarification on Wednesday, 11th July 2018, in relation to various news pieces published recently titled "SEBI rejects Max Group family trust's request for open offer exemptions."
With the intent of consolidating and simplifying its family holding in the three listed entities of the Max Group - Max Financial Services Ltd. (MFS), Max India Ltd. (Max India) and Max Ventures and Industries Ltd. (MaxVIL) - the Promoter Group had filed an application with SEBI for consolidating their various shareholdings under a family-owned and controlled trust, i.e., Neeman Family Foundation ("Neeman").
SEBI's Takeover Regulations permit open offer exemptions for promoter entities in cases of transfer of shares amongst persons/entities qualifying as promoters. This is subject to the conditions that such entities are named as promoters in the shareholding pattern filed by the target company for at least three years prior to the proposed acquisition.
Since Neeman, as the acquirer in the consolidation, did not satisfy the above mentioned three year requirement, a specific application seeking exemption from open offer requirement was filed with SEBI with respect to one of the steps involved in the consolidation, which would have resulted in Neeman acquiring majority control over one of the promoter entities. This step is not automatically exempt under the Takeover Regulations, however, such applications seeking exemption from open offer requirements are permitted under the regulations.
While SEBI has given an approval to Neeman for MFS, it has not granted the exemption in case of Max India and MaxVIL as Neeman does not meet the above-mentioned 3-year requirement. This is only because Max India and MaxVIL were formed 2 years ago, in 2016, after the three-way demerger of the erstwhile Max India Limited.
The promoters wish to clarify that Mr. Analjit Singh and family will continue to own and control the entire shareholding currently held by the promoter entities even after the proposed consolidation and believe that the benefit of the exemption granted to MFS should have been made available with respect to Max India and MaxVIL as well.
The promoters also wish to clarify that SEBI has not mandated an Open Offer anywhere in its order. Its order only provides that, 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.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)