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The Securities and Exchange Board of India (Sebi) has exempted the Mehta Family Trust, promoted by actor Juhi Chawla and industrialist Jay Mehta, from making an open offer for the proposed indirect acquisition of shares in Saurashtra Cement Ltd. The exemption has been granted as the transaction is part of an internal family restructuring for succession planning and does not change the company’s control or affect public shareholders. Sebi has imposed certain compliance conditions, including filing a report after the acquisition and completing the transaction within the specified validity period.
The Securities and Exchange Board of India (Sebi) has granted an exemption to the Mehta Family Trust from making an open offer for the proposed indirect acquisition of shares and voting rights in Saurashtra Cement Ltd. The relief was provided after the regulator concluded that the transaction is part of an internal restructuring of the promoter family and does not result in any change in the company’s ownership control or impact the interests of public shareholders.
The proposed transaction involves industrialist Jay Mahendra Mehta transferring his 49.99 per cent stake in Galaxy Technologies Pvt Ltd to the Mehta Family Trust. Actor Juhi Chawla Mehta will also transfer her 50.04 per cent profit-sharing and voting rights in Omna Enterprises LLP to the trust.
Galaxy Technologies Pvt Ltd and Omna Enterprises LLP are part of the promoter and promoter group of Saurashtra Cement Ltd. Together, the two entities hold a 24.04 per cent stake in the cement company. As a result of these transfers, the trust will indirectly acquire the corresponding shares and voting rights in Saurashtra Cement.
The Mehta Family Trust, which was registered in 2019, has Juhi Chawla and her husband Jay Mehta as its trustees. According to Sebi, the proposed indirect acquisition would normally trigger an open offer under the Sebi (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST Regulations), as such acquisitions generally require an offer to public shareholders after crossing prescribed thresholds.
However, the market regulator observed that the transaction is a non-commercial internal family reorganisation undertaken to streamline succession planning and consolidate promoter family holdings. Since the restructuring is limited to the promoter family, Sebi concluded that it would not adversely affect public shareholders.
In its order, Sebi Whole Time Member Kamlesh Chandra Varshney stated that the regulator had granted the Mehta Family Trust an exemption from complying with the open offer requirements under the SAST Regulations for the proposed indirect acquisition of shares in Saurashtra Cement Ltd.
The regulator further noted that there will be no change in the control or management of Saurashtra Cement after the transaction. The existing promoter group will continue to hold 66.62 per cent of the company's shareholding, while public shareholders will continue to own the remaining 33.38 per cent.
Sebi also observed that the Mehta Family Trust consists only of promoters, their immediate relatives and lineal descendants, making it effectively identical to the current promoter holding structure. This was one of the factors considered while granting the exemption.
The regulator has attached conditions to the approval. The trust will be required to submit a report within 21 days of completing the acquisition. Sebi also clarified that the exemption applies only to the mandatory open offer requirement and does not exempt the parties from complying with any other applicable regulatory provisions.
The exemption will remain valid for one year from the date of Sebi's order. If the proposed acquisition is not completed within this period, the exemption will automatically lapse.
The order is in line with Sebi's past approach of granting exemptions in promoter family restructuring cases where ownership is reorganised without changing effective control of the listed company. Such exemptions are generally considered when transactions are undertaken for succession planning, estate management or consolidation of family holdings, provided public shareholders' interests remain protected and all regulatory conditions are fulfilled.
Source PTI
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