Sebi exempts govt from making open offer to IOB shareholders
Capital market regulator, Securities and Exchange Board of India (SEBI) exempted the government from making an open offer to public shareholders for acquiring shares of Indian Overseas Bank (IOB). The order was issued after the Government planned to raise its stake in IOB by 5% to 79 % by infusion of Rs 1,200 Crore. After the purchase government’s stake in IOB will raise by little over 5% to 79.01%.
SEBI in its order has said that the minimum public shareholder level in IOB, which is 10% for public sector units, would be maintained even after the proposed hike in Government hike in the bank. There will be no change in the management control of the bank.
Note: As per the rules, when entities holding 25% or more stake in a company acquire an additional 5% or more stake in the firm, they are required to make an open offer so as to provide an exit opportunity to the public shareholders.