SEBI grants open offer exemption to Paisalo Digital for reorganisation purpose

SEBI grants open offer exemption to Paisalo Digital for reorganisation purpose

Market regulator Securities and Exchange Board of India (SEBI) has granted an exemption to two private family trusts of promoters of Paisalo Digital Ltd, allowing them to acquire shares and voting rights in the company without triggering an open offer under takeover regulations.

In an order issued on Friday, SEBI said it approved exemptions to Suneeti Dolaa Private Trust and Sulabhya Paramita Private Trust from complying with Takeover Regulations, for the proposed direct and indirect acquisition of shares in Paisalo Digital. Paisalo Digital is listed on BSE and NSE.

The two trusts are part of promoter family succession structuring. The acquisition is proposed via gift transfers of shares held directly by promoters Sunil Agarwal, Suneeti Agarwal and Santanu Agarwal and via indirect transfer of shares held in promoter group private entities.

SEBI said the trust reorganisation will not result in any change in control, will not change the aggregate promoter group shareholding in Paisalo, and will not alter public shareholding.

SEBI whole-time member Kamlesh Chandra Varshney stated in his order, “The proposed acquisitions are in furtherance to an internal reorganization within the Promoter Family and are intended to streamline succession and promote the welfare of the Promoter Family”. The order further stated that, “The proposed acquisitions would be non-commercial transactions which would not affect or prejudice the interests of the public shareholders of the Target Company in any manner”.

The regulator also recorded that the trusts confirmed compliance with SEBI’s February 2023 circular conditions relating to private trust structures used for promoter succession, including mirror shareholding, only promoter family beneficiaries and trustees.

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SEBI order stated that the proposed acquisitions shall be in accordance with the relevant provisions of the Companies Act and other applicable laws. Also, the proposed acquirers shall ensure that the covenants in the Trust Deeds are not contrary to the conditions of the order. If required, the Trust Deeds shall be suitably modified and expeditiously reported to SEBI.

The exemption will remain valid for one year. The trusts must complete the transfers within this period and file a report to SEBI within 21 days of consummation.

SEBI also warned that the exemption does not dilute disclosure obligations, insider trading compliance, LODR compliance, or any other law requirements.