SEBI okays indirect acquisition of 27% shares in Shriram Properties by CMD M Murali

Promoter and promoter group holding in Shriram Properties is 27.94 percent and most of this is held by Shriram Properties Holdings Pvt Ltd (SPHPL).

The market regulator has cleared the indirect acquisition of shares of Shriram Properties by the company's Chairman and Managing Director Murali Malayappan (or M Murali).

According to the exemption order issued on December 2 by the Securities and Exchange Board of India (SEBI), the indirect acquisition would not cause any change in control of the target company (Shriram Properties). Following the acquisition, the promoter and promoter group would continue to hold 27.94 percent of the company.

Indirect acquisition

Promoter and promoter group holding in Shriram Properties is 27.94 percent and most of this is held by Shriram Properties Holdings Pvt Ltd (SPHPL), which holds 27.72 percent of the company.

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The CMD owns 0.08 percent of the company.

Malayappan has applied to acquire 70.86 percent of SPHPL from Shriram Group Executives Welfare Trust (SGEWT) and applied for an exemption from the open offer clause under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations or SAST Regulations.

SGEWT, which is also a promoter group company of Shriram Properties with 0.14 percent holding in the listed entity, is also the majority shareholder of SPHPL.

Malayappan currently holds 20.33 percent of SPHPL.

After the acquisition, Malayappan will hold 91.19 percent of SPHPL.

The SEBI order noted, "The proposed indirect acquisition would not affect or prejudice the interests of the public shareholders of the Target Company in any manner."

It added, "There will be no change in control of the Target Company pursuant to the proposed acquisition."

The Takeover Panel had recommended that an exemption be granted to the proposed acquirer in this instance.

In the order, SEBI's Whole-time Member Ashwani Bhatia wrote, "I, in exercise of the powers conferred upon me under section 19 read with section 11(1) and section 11(2)(h) of the SEBI Act, 1992 and regulation 11(5) of the Takeover Regulations, 2011, hereby grant exemption to the Proposed Acquirer, viz., Mr. Murali Malayappan from complying with the requirements of regulations 3(1), 4 and 5(1) of the Takeover Regulations, 2011 with respect to the proposed indirect acquisition in the Target Company, viz., Shriram Properties Limited, by way of the proposed transaction as mentioned in the Application."