SEBI | Kingfisher’s chopped wings and shrinked wingspan | United Breweries Acquisition | Heineken exempted from the obligation under Takeover Regulations with exceptions

Securities and Exchange Board of India (SEBI): S.K. Mohanty, Whole Time Member, exempted Heineken International B.V from the obligation to make an open offer under Regulation 3(2) read with Regulation 3(3) of the Takeover Regulations, 2011 with respect to the proposed acquisitions of transfer shares of United Breweries Limited.

In the instant case, Heineken International B.V (Applicant and Acquirer)  had sought an exemption from the applicability of Regulation 3(2) and Regulation 3(3) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ( “Takeover Regulations, 2011”) in the matter of its proposed acquisition of a maximum number of 3,96,44,346 equity shares ( “Transfer Shares”) of the Target Company from the Recovery Officer of the Bangalore Debt Recovery Tribunal ( “Bangalore DRT”), under whose custody the Transfer Shares owned by the VJM Group were being held. Considering the unique issue and a further need for clarification and interpretation of the provisions involved in the application, the matter was recommended to a Panel of Experts, where they granted exemption subject to their compliance to the proviso.

Therefore, the tribunal took note of the opinion of the Panel and noted,

“…that the Recovery Officer is holding these shares in pursuance of the order of Debt Recovery Tribunal and it remains a mere technical requirement since the transaction would have been otherwise exempted under regulation 10 (1) (a) (ii) of the Takeover Regulations, 2011…”.


“…I also note that the Transfer Shares were originally held by the group companies of the promoter VJM, who defaulted in paying the outstanding dues to various Public Sector Banks and other Financial Institutions led by the SBI Consortium. Further, despite lapse of sufficient years of time and opportunities granted, the aforesaid outstanding liability has not been honored. I also note that VJM has been declared as a Fugitive Economic Offender…”.

Thus taking the public policy and public interest involved in the entire transaction, and the continuous steps taken by the agencies over the years to recover the dues of the Public Sector Banks and other Financial Institutions, the tribunal regarded that proposed Acquisition had merit for consideration. Therefore, granted a limited exemption which:

“…shall not be construed as exemption from the disclosure requirements under Chapter V of the aforesaid Regulations; compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, Listing Agreement / SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 or any other applicable Acts, Rules and Regulations…”.

[United Breweries Limited v. Heineken International B.V., 2021 SCC OnLine SEBI 156, decided on 22-06-2021]

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