The Exemption Under Regulation 10(1)(d)(iii)
Regulation 10(1)(d)(iii) of the SEBI (SAST) Regulations, 2011 exempts an acquisition of shares pursuant to a scheme of arrangement or amalgamation sanctioned by a competent tribunal from the obligation to make an open offer. The exemption is available where the acquisition is pursuant to the scheme and the scheme is approved by the NCLT.
The Regulation 10(6) Disclosure
The acquirer must file a disclosure under Regulation 10(6) with the stock exchanges, reporting the acquisition made in reliance on the exemption. The disclosure must include the details of the scheme, the NCLT order, the shares allotted, and the acquirer’s post-acquisition shareholding. A failure to file the disclosure does not invalidate the exemption, but it is a continuing disclosure obligation.
The Promoter Group Transfers
Where the acquisition is a transfer of shares between promoter group entities pursuant to a scheme of amalgamation, the exemption under Regulation 10(1)(d)(iii) applies. The disclosure should identify the transferor and transferee, their relationship, and the scheme’s approval.
The Listed-on-Listed Structure
In a listed-on-listed acquisition, the scheme is taken to the NCLT under Sections 230–232 after the stock exchange and SEBI approvals are in place. The SEBI approval and the NCLT sanction are sequential, and the exemption analysis should be completed before the NCLT filing.
The IBC Resolution Plan Overlay
Acquisitions under an IBC resolution plan approved by the NCLT are exempt from the open offer obligation under Regulations 3 and 4, and the Takeover Code exemption applies uniformly across resolution plans. A scheme that is not an IBC resolution plan cannot rely on this specific exemption; it must rely on Regulation 10(1)(d)(iii).
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