Sebi exempts NIIT promoters' trusts from making open offer

Sebi today exempted two private family trusts, set up by the promoters of NIIT, from making an open offer to the company's public shareholders.
Exemption has also been extended to the two trusts with respect to NIIT Technologies.
NIIT is a leading IT training solutions provider while NIIT Technologies is an IT firm. Thadani and Pawar families are among the promoters of both companies.
The exemption from making open offers have been given to Thadani Family Trust -- represented by its trustee Vijay Kumar Thadani -- and Pawar Family Trust. The latter is represented by its trustee Rajendra Singh Pawar.

In both companies, Thadani Family Trust and Pawar Family Trust are to acquire the shares issued by Global Consultancy and PIPL Consultancy, respectively.
Once the two trusts complete these acquisitions, their holdings in NIIT and NIIT Technologies would breach the 25 per cent threshold.

When shareholding of entity cross the 25 per cent threshold, then it is required to make an open offer for the public shareholders under the Sebi regulations.
The two trusts' shareholding would be 30.99 per cent in NIIT after the indirect acquisition of shares, while in the case of NIIT Technologies, it would be 30.80 per cent.

Sebi's latest ruling has come on separate pleas filed by the two trusts with respect to the two companies. They had sought exemption from making the open offer for the respective public shareholders of NIIT and NIIT Technologies.
As per the two separate but similarly-worded orders, the proposed transactions are pursuant to a private family arrangement intended to streamline the succession and welfare of the Thadani and Pawar families and would not affect the interest of the public shareholders.
The regulator has given the trusts exemption from open offer requirements subject to certain conditions.
Among others, Sebi has taken into consideration the fact that there would be no change in control of the respective companies after pursuant to the proposed indirect acquisitions.

After completion of the transactions, the trusts have been asked to file a report with Sebi as required under takeover regulations.