The Exemption Architecture
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 a mandatory open offer under Regulations 3 and 4. The exemption is automatic in the sense that no separate application to SEBI is required, but it is conditional on the acquisition being genuinely pursuant to the scheme.
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 that SEBI can enforce.
The Promoter Group Transfers
Where the scheme results in a transfer of shares between promoter group entities, the exemption under Regulation 10(1)(d)(iii) applies, and the disclosure should identify the transferor and transferee, their relationship, and the scheme’s approval. The disclosure should also record the pre- and post-scheme shareholding of the promoter group.
The IBC Resolution Plan Overlay
Acquisitions under an IBC resolution plan approved by the NCLT are exempt 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).
The Documentation
The file should contain: the scheme’s exemption recital; the Regulation 10(6) disclosure; the NCLT order; the post-scheme shareholding pattern; and the stock exchange acknowledgement. A scheme file that does not contain the Regulation 10(6) disclosure is incomplete on the SAST compliance front.
Call to Action: For SAST exemption assessment, Regulation 10(6) disclosure, or open-offer strategy, contact office@anujdesaiassociates.com or 9619456656. Website: https://anujdesaiassociates.com. LinkedIn: linkedin.com/in/ca-anuj-desai-122547230.