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WTM/PS/01/CFD/DCR-II/APR/2015

SECURITIES AND EXCHANGE BOARD OF INDIA


ORDER
In the matter of acquisition of shares and voting rights of Sunteck Realty Limited
Application filed under regulation 11 of the Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011
1.

Sunteck Realty Limited (hereinafter referred to as 'the Target Company') is a company


incorporated under the Companies Act, 1956, having its registered office at 5th Floor
Sunteck Centre, Subhash Road, Vile Parle East, Mumbai 400 059. The equity shares of
the Target Company are listed on the Bombay Stock Exchange Limited (hereinafter
referred to as 'BSE') and the National Stock Exchange of India Limited (hereinafter
referred to as 'NSE').

2.

Mr. Kamal Khetan and Ms. Manisha Khetan, in their capacity as the Trustees of
Matrabhav Trust and Astha Trust (hereinafter referred to as the 'Acquirers'/ 'Trusts'), has
filed an application dated January 24, 2014, with Securities and Exchange Board of India
(hereinafter referred to as 'SEBI') under regulation 11 of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as the
'Takeover Regulations'), seeking exemption from the applicability of regulation 3(1) of the
Takeover Regulations, with respect to the proposed acquisition of 2,89,01,937 (45.90%)
equity shares of the Target Company by the Acquirers from Mr. Kamal Khetan, Ms.
Manisha Khetan and Kamal Khetan HUF (hereinafter collectively referred to as the
'Transferor'). The Acquirers are the family trusts settled on August 27, 2013. Ms. Shanti
Khetan is the Settlor of both the Acquirers. Mr. Kamal Khetan and his wife Ms. Manisha
Khetan are the trustees of both the Acquirers. The beneficiaries of the Matrabhav Trust
are Mr. Kamal Khetan, Ms. Anupma Khetan and Master Akrur Khetan. The beneficiaries
of Astha Trust are Ms. Manisha Khetan, Ms. Anupma Khetan and Master Akrur Khetan.

3.

The application dated January 24, 2014 and the subsequent communications dated March
27, 2014, March 30, 2014, June 04, 2014, June 12, 2014 and July 03, 2014, in response to
the queries of SEBI, inter alia stated the following:
a. The promoters/ promoter group of the Target Company together hold 73.49% of the
equity share capital of the Target Company. The Transferors are part of the promoter

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group of the Target Company and holds 4.74%, 38.51% and 2.65% respectively of the
equity shares of the Target Company.
b. The Acquirers are settled on August 27, 2013. The Settlor of the trusts is the mother of
Mr. Kamal Khetan and mother-in-law of Ms. Manisha Khetan. She is grandmother of
Ms. Anupma Khetan and Master Akrur Khetan.
c. As per the private family arrangement, in order to re-align the Khetan family's
shareholding in the Target Company and with a view to facilitate succession planning,
Mr. Kamal Khetan and Kamal Khetan HUF have proposed to transfer the respective
holding in the Target Company to Astha Trust and Ms. Manisha Khetan has proposed
to transfer her holding to Matrabhav Trust by way of a gift through an off-market
transaction.
d. The Acquirers will be regarded as a person acting in concert with the promoters in terms
of regulation 2(q) of the Takeover Regulations, being part of the promoter or promoter
group.
e. The Acquirers are not persons disclosed as promoter in the shareholding pattern filed by
the Target Company in terms of the listing agreement for not less than 3 years prior to
the date of the proposed acquisition.
4.

According to the Acquirers, the shareholding of the Transferors i.e. 45.90% will be
transferred to the Acquirers. The proposed acquisition would increase the holding of
Matrabhav Trust from 0% to 38.51%. The discussed acquisition would also increase the
holding of Astha Trust from 0% to 7.39%. If both the acquisitions are clubbed together
the total shareholding of Acquirers will increase from 0% to 45.90% in the Target
Company, thus triggering regulation 3(1) of the Takeover Regulations. The application has
been made in respect of the said acquisitions in the Target Company, seeking exemption
from making an open offer in terms of the regulation 3(1) of the Takeover Regulations,
on the following grounds:
a. The total number of equity shares issued, subscribed and paid up as on December 31,
2013 is 6,29,66,207 equity shares. The total equity share capital/ voting rights of the
Target Company before and after the proposed acquisition will remain the same i.e.
6,29,66,207 equity shares.
b. The Transferors (i.e. Mr. Kamal Khetan, Ms. Manisha Khetan and Kamla Khetan HUF)
forms the part of promoter group alongwith the Settlor, Trustees and Beneficiaries of the
Acquirer Trusts.

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c. The Transferors and persons acting in concert with the Transferors are directly in control
of the Acquirers, as Ms. Manisha Khetan and Mr. Kamal Khetan are the Trustees of the
Matrabhav Trust and Astha Trust, hence there will be no change in control of the Target
Company after the proposed acquisition. The change in the identity of the persons who
will exercise voting rights over the Target Company through Matrabhav Trust and Astha
Trust, will only be between persons who, in their personal capacities, are promoters of the
Target Company.
d. The proposed acquisition is only a part of the internal re-alignment of holdings within the
Khetan family and will not affect the interests of the public shareholders of the Target
Company.
e. There will be no change in the shareholding pattern and management of the Target
Company, pre and post the proposed acquisition.
f. There is no fresh acquisition of shares by the promoter group and the pre-acquisition and
post acquisition shareholding of the promoter group in the Target Company would
remain the same i.e. at 73.49%.
g. The transaction will be a non-commercial transaction which will not prejudice the interest
of the public shareholders of the Target Company, in any manner.
h. The Acquirers will be regarded as a person acting in concert with the promoters in terms
of the regulation 2(q) of the Takeover Regulations.
5.

Later vide email dated June 12, 2014, the Acquirers have submitted that on further
reading of the Takeover Regulations, the Trusts would like to seek an exemption from the
regulation 3(2) of the Takeover Regulations.

6.

I have considered the application, the submissions/undertaking made in the subsequent


correspondence from the Acquirers and material available on record. The Acquirers have
proposed to acquire 45.90% shares/ voting rights in the Target Company from the
promoters of the Target Company, namely, Mr. Kamal Khetan, Ms. Manisha Khetan and
Kamla Khetan HUF. The proposed transfer to the Acquirers is intended to streamline
Khetan family's shareholding in the Target Company and facilitate succession planning
and welfare of Khetan family. The said acquisition would result in the increase of the
individual shareholding of the Matrabhav Trust from 0% to 38.51% and of Astha Trust
from 0% to 7.39%. As per the shareholding pattern of the Target Company as on the date
of application, i.e. January 24, 2014, the total shareholding of the promoter group was
73.49%. Out of the above, the Transferors together holds 45.90% and other promoter

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group entities collectively hold 27.59%. The other shareholders in the promoter group are
Mr. Akrur Khetan, Ms. Anupam Khetan, Ms. Shanti Khetan, Satguru Infocorp Services
Pvt. Limited, Starlight Systems Pvt. Limited, Sanchit Derivatives Pvt. Limited, Samagra
Wealthmax Pvt. Limited and Paripurna Trust. The proposed transfer of shares would be
by way of gift to the aforesaid Trusts. The shareholding pattern of the promoters and
promoter group of the Target Company (before and after the acquisition), are as under:
TABLE A
Promoter and Promoter group Before the proposed acquisition Proposed
After the proposed acquisition
No. of shares % of share capital Transaction No. of shares % of share capital
Manisha Khetan (Transferor)
2,42,51,407
38.51
-38.51%
0
0
Kamal Khetan (Transferor)
29,82,167
4.74
-4.74%
0
0
Kamal Khetan HUF (Transferor)
16,68,363
2.65
-2.65%
0
0
Matrabhav Trust (Acquirer)
0
0
38.51%
2,42,51,407
38.51
Astha Trust (Acquirer)
0
0
7.39%
46,50,530
7.39
27.58
0
1,73,69,128
27.58%
Others (promoter group other than 1,73,69,128
Transferors)
Total

7.

4,62,71,065

73.49

4,62,71,065

73.49

I note that the Acquirers are private family trusts settled by Ms. Shanti Khetan, one of the
promoters of the Target Company. The Transferors are the promoters of the Target
Company and fall within the definition of 'promoter group' under the SEBI (Issue of
Capital and Disclosure Requirements) Regulations, 2009 and the Acquirers would become
part of the promoter group pursuant to the proposed acquisition. Therefore, the Acquirer
would be regarded as a person deemed to be acting in concert with the promoters of the
Target Company in terms of regulation 2(1)(q)(2) of the Takeover Regulations. The
shareholding of the promoter group excluding the shareholding of Mr. Kamal Khetan,
Ms. Manisha Khetan and Kamla Khetan HUF is 27.59%. Pursuant to the proposed
transaction, the shareholding of the Acquirers would increase from 0.00% to 45.90%. The
same would increase the shareholding of the promoter group (excluding the shareholding
of Mr. Kamal Khetan, Ms. Manisha Khetan and Kamla Khetan HUF) from 27.59% to
73.49%. The above increase from 27.59% to 73.49% is beyond 5% thereby triggering
regulation 3(2) of the Takeover Regulations.
I also note that as the Acquirers do not hold any shares in the Target Company prior to
the proposed acquisition. Pursuant to the proposed transaction, the shareholding of the
Acquirers would increased from nil to 45.90% in the Target company. Accordingly, the
Acquirers would also be under an obligation to make an open offer as required under
regulation 3(1) of the Takeover Regulations unless exempted by SEBI.

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8.

As stated above, the beneficiaries of the Matrabhav Trust are Mr. Kamal Khetan, Ms.
Anupma Khetan and Master Akrur Khetan. The beneficiaries of the Astha Trust are Ms.
Manisha Khetan, Ms. Anupma Khetan and Master Akrur Khetan. The Trustees of both
these Trusts are Mr. Kamal Khetan and his wife Ms. Manisha Khetan. It is submitted by
the applicants, Mr. Kamal Khetan and his wife Ms. Manisha Khetan, the Trustees of both
Matrabhav Trust and Astha Trust, that the transferors along with the Settlor, Trustees and
beneficiaries of the Acquirer Trust form part of the promoter group of the Target
Company. Pursuant to the proposed transfer, the transferors (i.e., Ms. Manisha Khetan,
Mr. Kamal Khetan and Kamal Khetan HUF) instead of holding shares in their names
shall hold the same through the family trusts. Further, the proposed transfer of shares is
not being done to third parties but to private family trusts. It has been stated in the
application that the proposed transfer to the Acquirers is to streamline the shareholding
of the Khetan family in the Target Company and facilitate succession planning and
welfare of the Khetan family.
I also note that there would be no change in the shareholding of the public in the Target
Company pursuant to the proposed transaction and therefore may not be prejudicial to
their interests in the Target Company. I note that there would be no change in the
management or control of the Target Company as a result of the proposed transaction
between the Acquirers and the Transferors.
Considering all such factors, I am of the view that the Acquirers could be exempted from
the open offer obligations mandated under regulation 3(1) and 3(2) of the Takeover
Regulations in respect of the proposed acquisition of shares/ voting rights in the Target
Company.

9.

In view of the foregoing, I, in exercise of the powers conferred upon me under Section 19
of the Securities and Exchange Board of India Act, 1992 read with regulation 11(5) of
Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011, hereby grant exemption to the proposed Acquirers, namely, Matrabhav
Trust and Astha Trust from complying with the requirements of regulations 3(1) and 3(2)
of the Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011 with respect to their proposed acquisition of 2,89,01,937
equity shares (constituting 45.90%) of the Target Company namely Sunteck Reality
Limited by way of gift.

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10.

The exemption so granted is subject to the following conditions:


a. The proposed acquisition shall be in accordance with the relevant provisions of the
Companies Act, 2013 and other applicable laws and shall be completed within 30 days
from the date of this Order and the Acquirers shall file a report with SEBI in the manner
provided in SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
within 21 days from the date of the acquisition;
b. The statements/ averments made or facts/ figures given in the application and in the
subsequent correspondence by the Acquirers are true and correct to their best knowledge;
c. In case there is any change in the trustees or beneficiaries of the Trusts (Acquirers)
mentioned in exemption application, same will be subject to compliance with the
Takeover Regulations.
d. The Acquirers/ Target Company shall ensure compliance with the statements, disclosures
and undertakings made in the application and in their subsequent correspondence.

11.

The exemption granted above is limited to the requirements of making open offer under
regulations 3(1) and 3(2) of the SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011 and shall not be construed as exemption from the disclosure
requirements under Chapter V of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011, the compliance with the SEBI (Prohibition of Insider
Trading) Regulations, 1992, the Listing Agreement or any other applicable Acts, Rules and
Regulations.

12.

Accordingly, the application dated January 24, 2014, filed by Mr. Kamal Khetan and Ms.
Manisha Khetan on behalf of the Matrabhav Trust and Astha Trust is disposed off.

Date: April 06, 2015


Place: MUMBAI

PRASHANT SARAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA

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