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Securities Tribunal rejects Danny Gaekwad's request for exemption from takeover rules regarding Religare acquisition
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Business Standard
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Securities Tribunal rejects Danny Gaekwad's request for exemption from takeover rules regarding Religare acquisition

The Securities Appellate Tribunal (SAT) has rejected the appeal of businessman Didwijay Lakshmansingh Gaekwad, also known as Danny Gaekwad, who sought an exemption from regulatory requirements for making a competing open offer for Religare Enterprises (REL).

The Tribunal ruled that Gaekwad missed the stipulated 15-day deadline under SEBI regulations. The three-member bench, presided over by Justice P. S. Dinesh Kumar, noted that Gaekwad was required to submit his competing offer within 15 working days following the publication of the detailed public statement by Burman Group in October 2023.

Instead, Gaekwad approached SEBI only in January 2025, offering a price of ₹275 per share, compared to Burman Group's offer of ₹235. The Tribunal dismissed Gaekwad's argument that the 15-day period should be calculated from January 2025, when Burman Group sent the offer letter, or from subsequent advertising.

It observed that the wording of Regulation 20(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations is unambiguous and directly links the timelines to the detailed public statement. SAT also stated that allowing a competing offer at this stage would lead to unequal treatment of the 'first offer,' which had already deposited funds into an escrow account and received regulatory approvals.

The August 19 order mentioned: 'If the appellant's interpretation is accepted and his competing offer is considered, it will be regarded as gross discrimination against the first offer (in this case, Burman Group) to the extent that the sidelined appellant bypasses the first offer by not making his public offer within 15 days of the first offer's public announcement.'

Furthermore, the tribunal took into account Gaekwad's failure to comply with the Supreme Court's requirement to deposit ₹600 crore, which was set in February 2025. Although the Supreme Court granted a one-day extension, the deposit was still not made.

SAT concluded that the exemption provision under Regulation 11 does not allow for timeline extensions for the current open offer. The Burman Group's offer closed on February 13, 2025, rendering subsequent proceedings moot. Nevertheless, the tribunal indicated that the possibility of acquiring REL for Gaekwad is not closed, and he can initiate a new open offer while complying with the SAST Regulations.

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SAT allows Zee to issue preferential warrants worth 3143 crore rupees
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business-standard.com

SAT allows Zee to issue preferential warrants worth 3143 crore rupees

The Securities Appellate Tribunal (SAT) granted temporary permission to the media company Zee Entertainment Enterprises (Zee) to continue issuing preferential warrants worth 3143 crore rupees.

Zee and its CEO, Poonam Goenka, appealed to the tribunal against the order by the Securities and Exchange Board of India (Sebi) dated July 31, which restricted the company's access to the securities market.

The two-month ban affected the company's planned fundraising. In its oral order, the bench stated that 'the appellant company and Goenka may complete the issuance of fully convertible warrants for the group promoters on a concessional basis provided that the full amount of the penalty is paid within one week by both applicants.'

The tribunal extended the deadline for completing the concessional issuance by another week. The previously set 14-day period was due to expire on Friday, August 14.

However, the ban on accessing the securities market mentioned in the Sebi order will remain in effect.

The market regulator banned Goenka for 12 months, while Zee was restricted from accessing the securities market for two months. Sebi also imposed a fine of 58 lakh rupees on Goenka and 30 lakh rupees on Zee. Promoter Subhash Chandra was also banned for 12 months and fined 60 lakh rupees.

Challenging the Sebi decision, Zee sought permission to conduct the planned issuance of preferential warrants worth 3143 crore rupees, as well as an extension of the 14-day period for its completion, considering the time elapsed since the decision was made. These preferential warrants are to be issued to the Sunbright Mauritius Investments group of promoters.

Zee also requested permission to access its mutual funds to distribute dividends in September after the Annual General Meeting (AGM).

The bench ruled: 'The appellant company is permitted to operate the mutual funds for day-to-day business needs, and not for any other purposes, including the payment of proposed dividends.'

The matter relates to the use of one of Zee's land assets in Hyderabad as collateral for loans obtained by four entities of the Essel Group. These entities received four separate loans totaling 726 crore rupees from Indiabulls Housing Finance Ltd (IHFL).

The Sebi order notes that in December 2018, Chandra signed a Declaration and Undertaking (D&A) in favor of IHFL on behalf of Zee. The regulator asserted that the benefit from using Zee's property transferred to the entities presumably controlled by Goenka and Chandra, as well as their family members.

Although the D&A contained a statement that Zee had obtained all necessary permissions and approvals from the authorities to create a first-rank mortgage and possessed the requisite authority to secure the debts of the borrowed entities, the Sebi investigation revealed that prior approval from Zee's audit committee, board of directors, or shareholders had not been obtained.

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