The Securities and Exchange Board of India (SEBI) has approved the indirect acquisition of shares in Shriram Properties by its Chairman and Managing Director, Murali Malayappan.
The regulator’s exemption order issued on Monday said that the acquisition will not lead to any change in control of Shriram Properties since the promoter and promoter group will retain their 27.94% stake in the company.
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Currently, most of this stake is held through Shriram Properties Holdings (SPHPL), which owns 27.72%, while Malayappan directly holds 0.08%. The CMD has applied to acquire a 70.86% stake in SPHPL from the Shriram Group Executives Welfare Trust (SGEWT), another promoter group entity that owns 0.14% of Shriram Properties.
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Malayappan already holds 20.33% of SPHPL. Following the acquisition, his stake in SPHPL will increase to 91.19%, consolidating his position within the promoter group.
“The proposed indirect acquisition would not affect or prejudice the interests of the public shareholders of the target company in any manner,” SEBI’s whole-time member Ashwani Bhatia said in the order.
On completion of the proposed acquisition, the acquirer has to file a report with SEBI within 21 days from the date of the acquisition.
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Further, the order said that this is only an exemption from the requirement of making an open offer and not for making disclosures. The exemption is available for only a year, after which, it will lapse.
This exception follows a recommendation of granting an exemption from the open offer requirement under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations.
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