SEBI grants exemption for Neogen Chemicals' family trust acquisition

SEBI examined whether this reorganization of shareholding among family members warranted an exemption from the standard acquisition rules.

Who it concerns: Neogen Chemicals Limited (Target Company); Haridas Kanani Family Trust, Beena Kanani Family Trust, Harin Kanani Family Trust, and H T Kanani Family Trust (Acquirer Trusts); Haridas Thakarshi Kanani, Harin Haridas Kanani, and Beena Haridas Kanani (Transferors/Promoters).

What SEBI found or ordered

• SEBI granted an exemption from the applicability of Regulations 3 and 4 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
• The proposed acquisition involves the direct transfer of 41.90% of the shares and voting rights in Neogen Chemicals Limited from individual promoters to the four Acquirer Trusts.
• The transaction is described as a non-commercial reorganization intended for family succession and welfare, with no change in effective control or management.
• The public shareholding of the Target Company remains unchanged at 48.77%.
• The Acquirer Trusts are required to confirm annual compliance with the exemption order and get this status certified by an independent auditor.

Also in the document

• The order confirms that the total equity share capital of the Target Company will not be altered by this acquisition.
• The Acquirer Trusts are structured as irrevocable, private trusts settled under the Indian Trusts Act, 1882.
• SEBI noted that the settlors, trustees, and beneficiaries of the trusts are all members of the Kanani family or their immediate relatives.