The condition of three year shareholding by the transferees prior to the proposed acquisition (by inter-se transfer) would be deemed to be fulfilled in case all the transferees collectively hold shares for a period of three years, provided the other conditions for availing the exemption are fulfilled.

This was the message SEBI given in an informal guidance, when it exempted Weizmann Forex from the obligation to make an open offer for inter-se transfer of shares despite one of the transferees not holding shares in the company for more than three years.

Inter-se transfer refers to transfer of shares among promoter group entities and gets exemption from open offer obligation if both the transferor and the transferee have been holding shares in the company for over three years.

SEBI said that the transferors had been holding shares in Weizmann Ltd for more than three years and one of the transferors had been holding shares in Weizmann Ltd and Weizmann Forex for more than three years.

SEBI also observed that one transferee Windia Infrastructure Finance held 18.89 per cent in Weizmann Ltd pursuant to demerger and held shares in Weizmann Ltd and Weizmann Forex for more than three years. The other transferee Tapi Projects Ltd did not hold shares in the company for more than three years.

raghavendrarao.k@thehindu.co.in

(This article was published on January 23, 2013)
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