The Supreme Court upheld SAT’s decision that Regulation 10 of SEBI (SAST) Regulations applies to combined shareholding of acquirer and PAC. SEBI’s appeals were dismissed.
SC Affirms Combined Holding Under SAST Regulations
The Supreme Court dismissed SEBI’s appeals and upheld the Securities Appellate Tribunal’s interpretation that Regulation 10 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 applies to the aggregated shareholding of an acquirer and a person acting in concert (PAC). The Court confirmed that joint control or coordinated strategy triggers mandatory open offer obligations.
The ruling clarified the scope of 'concerted actions' and emphasized the Tribunal’s jurisdiction under Section 15T of the SEBI Act, 1992 to interpret regulatory thresholds. The Court refrained from expanding SEBI’s enforcement powers, highlighting the need for proportionality in open offer triggers.
This judgment provides definitive guidance on takeover regulations. Practitioners must conduct rigorous PAC assessments during acquisitions. Structuring shareholding to avoid deemed aggregation will require stricter documentation and independent intent verification to withstand regulatory scrutiny.
Citations
- SEBI (SAST) Regulations, 2011: Regulation 10
- SEBI Act, 1992: Section 15T
