Supreme Court upholds SAT’s application of Regulation 10 to combined acquirer-PAC holdings, dismissing SEBI appeals and clarifying SAT’s powers under Section 15T of SEBI Act.
Supreme Court Affirms Combined Holding Norms in Takeovers
The Supreme Court has upheld the Securities Appellate Tribunal’s interpretation that Regulation 10 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations applies to the combined shareholding of an acquirer and its Persons Acting in Concert (PAC), reinforcing mandatory open offer obligations upon breaching thresholds.
The Court dismissed SEBI's appeals challenging SAT's orders, confirming that joint intent and coordinated action between parties trigger open offer requirements even without formal agreements. It also clarified the scope of SAT’s powers under Section 15T of the SEBI Act, 1992, affirming its authority to set aside and modify SEBI directions.
"Regulation 10 is designed to ensure market fairness and protect minority shareholders when control shifts through concerted activity."
This judgment strengthens disclosure and takeover compliance regimes. Practitioners advising on acquisition structures must now assess PAC relationships rigorously and anticipate consolidated holding scrutiny during due diligence.
Citations
- SEBI (Substantial Acquisition of Shares and Takeovers) Regulations
- Section 15T, SEBI Act, 1992
