WTM/PS/148/CFD/DCR-II/FEB/2016

SECURITIES AND EXCHANGE BOARD OF INDIA

ORDER
In the matter of acquisition of shares and voting rights of Wipro Limited Application
filed under regulation 11 of the Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulations, 2011

1.

Wipro Limited (hereinafter referred to as 'the Target Company') is a company

incorporated under the Companies Act, 1956, having its registered office at Doddakannelli,
Sarjapur Road, Bangalore 560 035. The equity shares of the Target Company are listed on the
Bombay Stock Exchange Limited (hereinafter referred to as 'BSE') and the National Stock
Exchange of India Limited (hereinafter referred to as 'NSE').
2.

Hasham Investment and Trading Company Private Limited (hereinafter referred to

as the 'Acquirer' or HITCPL), filed an application dated August 20, 2014 with the Securities
and Exchange Board of India (hereinafter referred to as 'SEBI') under regulation 11 of the SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as the
'Takeover Regulations'), seeking exemption from the applicability of regulation 5 and 3(1) read
with 3(3) of the Takeover Regulations with respect to proposed acquisition of shares of Target
Company through scheme of arrangement involving certain promoter group companies of the
Target Company. The application dated August 20, 2014 inter alia stated the following:
a. The Acquirer, HITCPL, is a private limited company incorporated on May 10, 1983. It is
engaged in rendering investment advisory services to venture capital funds registered with
SEBI.
a. The entire equity capital of the Acquirer is held by Azim Premji Trustee Company Private
Limited in its capacity as trustee of Azim Premji Trust which is part of the promoter and
promoter group of Target Company. Azim Premji Trustee Company Pvt Ltd also holds
42,97,14,120 equity shares representing 17.42 % in Target Company in its capacity as
trustee of Azim Premji Trust.

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Azim Premji Trustee Company Private Limited is in turn substantially wholly owned by
Mr. Azim Hasham Premji with one share being held by Smt. Yasmeen A. Premji.
The Acquirer does not hold any shares and therefore has not been included as part of the
promoter and promoter group.
b. As per the shareholding pattern of the Company as on March 31, 2014, the promoter and
promoter group of the Target Company hold 73.47%, as per details below:

Azim Hasham Premji

9,34,05,100

3.79

Yasmeen A Premji

10,62,666

0.04

Rishad Azim Premji

6,86,666

0.03

Tariq Azim Premji

2,65,000

0.01

Napean Trading & Investment Company Pvt Ltd (Napean or

NTICPL)

1,87,666

0.01

Vidya Investment & Trading Company Pvt Ltd (Vidya OR

VITCPL)

1,87,666

0.01

Regal Investments & Trading Company Pvt Ltd (Regal OR

RITCPL)

1,87,666

0.01

Azim Premji Foundation (I) Pvt Ltd

1,08,43,333

0.44

Azim Hasham Premji Partner Representing Prazim Traders

45,29,06,791

18.36

10 Azim Hasham Premji Partner Representing Zash Traders

45,16,19,790

18.31

11 Azim Hasham Premji Partner Representing Hasham Traders

37,09,56,000

15.04

12 Azim Premji Trust

42,97,14,120

17.42

1,81,20,22,464

73.47

Total

b. Napean, Vidya and Regal are part of the promoter and promoter group of Target
Company, individually holding 1,87,666 equity shares representing 0.01 percent of the total
equity share capital of Target Company. Together they hold 5,62,998 equity shares
comprising 0.03%. The equity shares of NTICPL are equally held by VITCPL and
RITCPL. Likewise, the equity shares of VITCPL are equally held by NTICPL and RITCPL
and the equity shares of RITCPL are equally held by NTICPL and VITCPL. Additionally
each of NTICPL, VITCPL and RITCPL has issued 18 percent redeemable preference
shares that are wholly held by the Acquirer.

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c. Napean, Vidya and Regal are categorized as non-banking finance companies (NBFCs)
holding a valid certificate of registration issued by Reserve Bank of India (RBI).
d. NTICPL is a partner in M/s Hasham Traders, VITCPL is a Partner in M/s Prazim Traders
and RITCPL is a partner in M/s Zash Traders.
e. M/s Hasham Traders, M/s Prazim Traders and M/s Zash Traders are also part of the
promoter and promoter group of Target Company, collectively holding 51.71% in the
Target Company. Holding details of partnership firms in the Target Company are as
follows-

Particulars

No of equity shares

% holding

Hasham Traders

37,09,56,000

15.04

Prazim Traders

45,29,06,791

18.36

Zash Traders

45,16,19,790

18.31

1,27,54,82,581

51.71

Total

f. In terms of direction 20A of the Non-Banking Financial (Non-deposit Accepting or

Holding) Companies Prudential Norms (Reserve Bank) directions, 2007 (introduced vide
notification dated March 30 2011), no NBFC shall contribute to the capital of a partnership
firm or become partner of such firm. Further, NBFCs which had already contributed to
the capital of a partnership firm or was a partner in such firm as on the date of the
notification were required to seek early retirement from such partnership firm.
In the light of the above direction of RBI, it has been proposed that NTICPL, VITCPL
and RITCPL shall be merged into the Acquirer. The scheme of arrangement has also been
filed with Hon'ble Karnataka High Court for approval. The proposed scheme shall assist
in consolidating all the NBFC businesses of the promoter group into one legal entity
namely HITCPL (the Acquirer).
Following the merger, the equity shares and 18 percent redeemable preference shares
issued by NTICPL, VITCPL and RITCPL shall be cancelled. The assets including the

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interest in the equity shares of Target Company and the interest in the partnership firms
(Hasham Traders, Prazim Traders and Zash Traders) and liabilities of these entities shall
be transferred to Acquirer.
g. On completion of the scheme of arrangement, the partnership deed of each of M/s.
Hasham Traders, M/s. Prazim Traders and M/s. Zash Traders shall stand reconstituted
and HITCPL shall stand inducted as a partner in these three firms. However, the same
would result in HITCPL qualifying as an NBFC which again would lead to it being noncompliant with the RBI Direction 20A. To meet the requirement, it was proposed that
HITCPL on reconstitution of the partnership firms pursuant to the scheme of
arrangement shall retire as a partner of the three partnership firms and concurrently a trust
Apex trust (or such other name as may be determined) shall be admitted as a partner.
HITCPL shall be a beneficiary of the Apex Trust. Azim Premji Trustee Company Private
Limited is proposed to be appointed as the trustee of the Apex Trust.
h. The merger of NTICPL, VITCPL and RITCPL into Acquirer shall result in the Acquirer
directly holding equity share of Target Company aggregating 5,62,998 equity shares
representing 0.03 percent of the outstanding share capital of Target Company. The merger
will also result in the reconstitution of the partnership firms, the partnership deed of each
of M/s Hasham Traders, Prazim Traders and Zash Traders shall stand reconstituted and
Acquirer shall stand inducted as the partner in these three firms, which together hold
51.71% equity share capital of Target Company.
i.

The reconstitution of the partnership firm may be construed as change in control at each
of Hasham Traders, Prazim Traders and Zash Traders, which would lead to an open offer
in terms of regulation 5 read with regulation 3(1) and regulation 3(3) of the Takeover
regulations. In this regard, it was submitted that
(i)

Hasham Traders, Prazim Traders and Zash Traders shall continue to remain the
shareholders of the target company and the equity shares of the target company
shall be held by Mr. Azim Premji or any other partner in the firms for and on
behalf of these partnership firms.

(ii)

The scheme of arrangement is only an internal re-organization of the promoter

and promoter group and among entities that are directly or indirectly wholly
controlled by Mr. Azim H. Premji and members of his family.

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(iii)

Consequently, there is no change in the control or management of the target

company.

j.
3.

In view of the above, the Acquirer sought exemption as mentioned above.

Thereafter, vide letter dated September 02, 2015, the Acquirer, while reiterating the

contents of the application inter alia submitted that Napean, Vidya and Regal, the three NBFCs,
have since merged into HITCPL (the Acquirer) pursuant to the sanction of the scheme of
Amalgamation by the Honble High Court of Karnataka vide order dated March 26, 2015, with
April 01, 2014 as the Appointment Date. It was also stated that on filing of the said orders with
the Registrar of Companies, the scheme of amalgamation has become effective on April 07, 2015
and NTICPL, VITCPL and RITCPL have dissolved without the process of winding up. It was
also submitted that pursuant to the scheme of amalgamation, the shares of the target company
which were held by the three NBFCs have vested in HITCPL and also that in the three partnership
firms Hasham Traders, Prazim Traders and Zash Tarders, HITCPL has substituted NTICPL,
VITCPL and RITCPL respectively. The Acquirer also submitted the following grounds in respect
of its request for exemption:
(i) NTICPL, VITCPL and RITCPL, the transferor companies in the Scheme of
Amalgamation, held each others shareholding, whereas Acquirer the transferee
company is held by Azim Premji Trustee Company Private Limited in its capacity
as trustee of Azim Premji Trust. Regulations 10(1)(d)(iii) exempts a scheme where
the persons directly or indirectly holding 33% of the voting rights in the combined
entity are the same as the persons who held the entire voting rights before the
implementation of the scheme. In the present case, while Acquirer, pre and postmerger, is fully held by Azim Premji Trustee Company Private Limited in its
capacity as trustee of Azim Premji Trust, NTICPL, VITCPL and RITCPL (the
transferee companies) pre-merger were not, directly or indirectly, held entirely by
Azim Premji Trustee Company Private Limited in its capacity as trustee of Azim
Premji Trust.
(ii) Change in the partner of a partnership firm is not specified under the general
exemptions provided under regulation 10. However, there is no change in the
number of shares in Wipro Limited which the partnership firms are holding.

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The above changes have occurred on account of operation of law, which is not
specified under the general exemptions under regulation 10. It was reiterated that
there is no change in control of the target company on account of the scheme of
amalgamation.
4.

Recommendation of the Takeover Panel: In view of the above, the said application and

submissions were referred to the Takeover Panel, in terms of regulation 11(5) of the Takeover
Regulations, for their recommendation. The Takeover Panel, vide Report dated October 05, 2015,
recommended as under:
. it was observed that pursuant to the merger only an entity which is fully owned and controlled by
Azim Premji Trust would directly/indirectly acquire shares of the target company and thus, there is no real
change in ownership or control of the shares of the target company. Further, the proposed scheme has also
been approved by the Hon'ble High Court of Karnataka. In view of the above, the case was recommended
for exemption.
5.

I have considered the application, the submissions/undertaking made in the subsequent

correspondence from the Acquirers and the recommendation of the Takeover Panel. As per the
application, the proposed scheme and transaction is for complying with the RBI direction and is
only an internal re-organization of the promoter and promoter group and among entities that are
directly or indirectly wholly controlled by Mr. Azim H Premji and members of his family. It is
submitted by the Acquirer that the Hon'ble Karnataka High Court has sanctioned the scheme of
amalgamation vide its order dated March 26, 2015 and also directed that the transferor companies
(NBFCs) stand dissolved without the process of winding up and amalgamated with the Acquirer.
The Acquirer has also stated that it has substituted the entities that have merged into it in the three
partnership firms and that the shareholding of the merged entities also vested in it.
6.

As per the Shareholding Pattern of the Company for the quarter ended September 2015,

it is noted that HITCPL holds 5,62,998 shares (0.02%) in the Target Company. As per the
application, the Acquirer has stated that the following are its PACs in the proposed transaction:
(a) Azim Hasham Premji
(b) Yasmeen A. Premji
(c) Rishad Azim Premji
(d) Tariq Azim Premji
(e) Azim Premji Foundation (I) Limited

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(f) Azim Premji Trust

(g) Azim Premji representing Prazim Traders
(h) Azim Premji representing Zash Traders, and
(i) Azim Premji representing Hasham Traders.
The above persons/entities form part of the promoter and promoter group of the Company as
per the above said shareholding pattern. The Acquirer is 100% held by Azim Premji Trustee
Company Private Limited in its capacity as trustee of Azim Premji Trust, which is also part of the
promoter and promoter group of the Company.
7.

As regards the partnership firms, I note that the Acquirer holds 35% share of profits, along

with its subsidiary in each of the three firms, as it replaced the three NBFCs which were
amalgamated into itself pursuant to the sanction of the scheme of arrangement by the Honble
High Court. As it is stated that the three partnership firms shall continue to remain the
shareholders of the Target Company and the equity shares in the Target Company shall continue
to be held by Mr. Azim Premji or any other partner in the firms for and on behalf of these
partnership firms, it is clear that the Acquirer can, directly (exercise 0.02%) and indirectly (through
Prazim Traders, Hasham Traders and Zash Traders together holding 51.64% in the target company), exercise
51.66% of shares/voting rights in the Company and be obligated to make an open offer for such
acquisition under regulations 3(1) read with 3(3) and 5 of the Takeover Regulations, unless
exempted by SEBI from such obligation.
8.

The Acquirer has also proposed that on reconstitution of the partnership firms (which

action has already taken place), it would retire as a partner from the three partnership firms and
concurrently a trust Apex Trust shall be admitted as a partner and that the Acquirer shall be its
beneficiary. It was also proposed that Azim Premji Trustee Company Private Limited would be
the Trustee of the said Apex Trust. I also note that there is no change in the public shareholding
and the Company shall continue to be in compliance with the minimum public shareholding
requirements under the SCRR and the Listing Agreement.
9.

Considering the foregoing and the factors that there is no change in the control or

management of the target company post the proposed transaction and that it is only an internal
re-organisation of the promoter and promoter group and amongst entities that are directly or
indirectly controlled by Azim Premji and members of his family, and the recommendation of the

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Takeover Panel to grant exemption, I am of the view that exemption as sought for in the
application may be granted.
10.

In view of the foregoing, I, in exercise of the powers conferred upon me under Section 19

of the Securities and Exchange Board of India Act, 1992 read with regulation 11(5) of Securities
and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011,
hereby grant exemption to the Acquirer, Hasham Investment and Trading Company Private
Limited, from complying with the requirements of regulations 5 read with 3(1) and 3(2) of the
Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011 with respect to the acquisition of shares of Target Company, as proposed in the
Application dated August 20, 2014, subject to the Acquirer complying with the statements and
undertaking made in its Application.
11.

The exemption granted above is limited to the requirements of making open offer under

regulation 5 read with regulations 3(1) and 3(3) of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011 and shall not be construed as exemption from the disclosure
requirements under Chapter V of the SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011, the compliance with the SEBI (Prohibition of Insider Trading) Regulations,
1992/2015, the Listing Agreement/Regulations or any other applicable Acts, Rules and
Regulations.
12.

Accordingly, the application dated August 20, 2014, filed by Hasham Investment and

Trading Company Private limited is disposed off.

PRASHANT SARAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA
Date: February 03, 2016
Place: Mumbai

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