Sebi approves rejig in Jefferies India ownership

Sebi approved change, granted it fresh registration through a letter dated 16th July

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Jefferies India, the local arm of global investment banking firm Jefferies, has received regulatory clearance for an indirect change in control of the company.

The Securities and Exchange Board of India (Sebi) approved the change and granted it fresh registration through a letter dated July 16, according to a regulatory notification.

Leucadia National picked up 71 per cent in Jefferies in a deal completed in March. Indian regulators saw this as an indirect change of control, now that the ultimate ownership rested with Leucadia. The brokerage subsequently had to go in for certain regulatory re-registrations. A source suggested there had not been a change in management on the ground in India.

“…This is not change in management, but a change in ultimate beneficial ownership to Leucadia, with whom Jefferies merged in early March of this year.  This change is driving some regulatory re-registrations in India – all administrative – nothing more,” said the person.  Leucadia paid $2.76 billion for a 71 per cent stake in the company.

“On March 1, Jefferies Group Inc….in connection with our merger with Leucadia National Corporation… converted into a limited liability company, Jefferies Group LLC …and became a wholly-owned subsidiary of Leucadia,” said the company’s latest earnings release.  The Asian market accounts for a relatively smaller piece of its overall revenue pie.

The company had revenue of $102.9 million from its Asian region, according to its last annual report. Figures for India were not available.  It had net revenue of $2.99 billion for its last financial year which ended in November 2012.Of this, $2.46 billion came from its operations, mostly out of the US.
INDIRECT CHANGE IN CONTROL

• Leucadia buys 71 per cent stake in the company in a global deal
• Regulators see indirect change in control
• India entities required to re-register
• Source suggests no on-the-ground change in India
• Sebi approves re-registration on July 16