Addendum to the Final Order dated August 19, 2025 in the matter of Swaraj Shares and Securities Private Limited
- Order No.WTM/AN/CFD/CFD-SEC-5/31607/2025-26
Ratio decidendi
The rule this decision rests on
Where a public announcement has already been made in an open offer, the interest of investors in an exit opportunity and the orderly completion of the regulatory process justify permitting a merchant banker whose registration is suspended to complete those pending assignments, notwithstanding the suspension. That permission is conditional. The merchant banker must first disclose the suspension order to each acquirer or client whose assignment is pending, and each such acquirer or client must give explicit consent to continue with the merchant banker for the limited purpose of completing that assignment. The clarification is to be read as part of the original suspension order.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
1. Securities and Exchange Board of India (“SEBI”) had passed a Final Order dated August 19, 2025 bearing reference No. WTM/AN/MIRSD/MIRSD-SEC- 4/31596/2025-26 in the matter of Swaraj Shares and Securities Private Limited (“Order dated August 19, 2025”). In paragraph 81 of the aforementioned Order, the following direction was issued against Swaraj Shares and Securities Private Limited (“Noticee”):
“In view of the foregoing, I, in the exercise of powers conferred upon me under sub section (3) of section 12 and section 19 of the SEBI Act, 1992 read with the sub-regulation (5) of regulation 27 of the Intermediaries Regulations, hereby direct that the certificate of registration of the Noticee i.e. Swaraj Shares and Securities Private Limited (SEBI Registration No. INM000012980) be suspended for a period of 3 (three) months from the date of this order.”
2. Now, it has been brought to my notice that the Noticee was engaged as a Merchant Banker in some open offers under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 where public announcement has already been made. Once the open offer process has commenced, the acquirer and PACs are required by regulatory processes to provide an exit opportunity to the public shareholders. Any delay or abeyance in the open offer processes may prejudice investor interests.
Addendum to the Final Order dated August 19, 2025 in the matter of Swaraj Shares and Securities Private Limited
3. Therefore, in the interest of investors and orderly completion of regulatory process, it is clarified that the Noticee may complete open offer assignments where the Public Announcement has already been made, subject to the following safeguards:
a. The Noticee shall make a disclosure of the SEBI Order dated August 19, 2025 to the acquirers/clients whose assignments are pending completion. b. The respective acquirers/clients shall provide explicit consent to continue with the Noticee as Merchant Banker for the limited purpose of completing the ongoing assignments.
4. The Order dated August 19, 2025 shall always be read along with this Clarification.
Date: August 22, 2025 Sd/- Place: Mumbai ANANTH NARAYAN G. WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA
Addendum to the Final Order dated August 19, 2025 in the matter of Swaraj Shares and Securities Private Limited
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