Transfer sans Price Won’t Attract Open Offer: SEBI

Transfer of shareholding in excess of 25 per cent from one promoter entity to another without a price being paid and without change in paid-up capital, shareholding pattern or management control will not attract an open offer, ruled SEBI in the case of NRB Industrial Bearings Ltd.

SEBI found that one promoter trust of NRB comprising Trilochan Singh Sahney and Hanwantbir Kaur Sahney as trustees, acquired 94.38 lakh (38.95 per cent) equity shares of NRB from another promoter trust of which both individuals were trustees.

Other beneficiaries of the acquiring trust are the son and daughter of the duo Devesh Singh Sahney and Harshbeena Sahney Zaveri, respectively.
No change in holding pattern

NRB Industrial Bearings is a wholly owned subsidiary of NRB Bearings Ltd. The promoter family had agreed among themselves that the management and day-to-day control of NRB Bearings Ltd would primarily be with its Managing Director Harshbeena Sahney Zaveri, and that of NRB Industrial Bearings with Managing Director Devesh Singh Sahney.

SEBI reasoned that the proposed transfer of stake from one trust to another was an internal reorganisation within the Trilochan Singh Sahney family. The said acquisition would result in the increase of the individual shareholding of the acquirer from zero per cent to 38.95 per cent in the company. However, there would be no change in the shareholding pattern of NRB Industrial Bearings with the total shareholding of the promoter group remaining at 72.36 per cent.

Of the above, the first trust would transfer its entire shareholding of 38.95 per cent to the second with other promoter group entities collectively still holding the same 33.41 per cent stake.

Finding it fit for exemption, SEBI ordered that the share transfer between the trusts would be exempt from an open offer obligation.

Business Line, New Delhi, 12-03-2014