Sebi exempts two trusts from making open offer to Linc's shareholders

Once the transaction is complete, the acquirer trusts would collectively hold 9.96% stake in Linc

Capital market regulator Sebi on Monday exempted two trusts from making an open offer to the shareholders of Linc Ltd in connection with their proposed acquisition of a 9.96 per cent stake in the company.

The order came after two trusts -- Suraj Mal Jalan Trust and Bimla Devi Jalan Trust -- filed an application in April 2023, and sought exemption from certain provisions of takeover regulations.

The acquirer trusts have been set up as private family trusts with the intent to ensure the maintenance and promotion of peace, harmony and unity between the family members of Suraj Mal Jalan and Bimla Devi Jalan.

Under the proposed acquisition, Suraj Mal Jalan and his wife Bimla Devi Jalan intend to transfer a total of 6.18 per cent and 3.78 per cent of their stakes in the firm to Suraj Mal Jalan Trust and Bimla Devi Jalan Trust, respectively, according to a Sebi order.

Once the transaction is complete, the acquirer trusts would collectively hold 9.96 per cent stake in Linc.

Suraj Mal Jalan is part of the company's promoter group and Bimla Devi Jalan is his wife, as per data available on the BSE.

The proposed transaction triggers the open offer requirement under the takeover regulations and accordingly, the trusts had sought exemption from the norms.

Under the rules, entities acquiring more than a 5 per cent stake in a listed company have to make an open offer to the company's shareholders.

Granting an exemption from the open offer, Sebi noted that the proposed transaction is aimed to streamline the succession and welfare of the Suraj Mal Jalan family.

Also, it noted that the pre-acquisition and post-acquisition the shareholding of the promoter and promoter group in Linc will remain the same and there will be no change in the control and management of the target company.

Accordingly, Sebi has granted "exemption to the proposed acquirers, viz. Suraj Mal Jalan Trust and Bimla Devi Jalan Trust from complying with the requirements of ... the Takeover regulations, 2011 with respect to the proposed direct acquisition in the Target Company, viz. Linc Ltd, by way of proposed transaction".

Further, Sebi said the exemption granted is limited to the requirements of making an open offer under the Takeover regulations and shall not be construed as an exemption from the disclosure requirements.