The capital market regulator has mentioned that Bajaj Finserv is required to hunt shareholder approval and make disclosures underneath the Sebi Itemizing Obligations and Disclosure Necessities (LODR) rules.
Bajaj Finserv on July 27, 2023 wrote to Sebi in search of an off-the-cuff steerage if a transaction between BAGIC and Allianz SE was associated with the mum or dad firm. In its letter, Bajaj Finserv mentioned that the phrases “transaction with the associated get together” LODR rules recommend that the transaction should be with the associated get together/ies of the listed entity and wouldn’t embody a transaction between a subsidiary of listed entity and a celebration, which isn’t a associated get together of the listed entity.
Bajaj Finserv sought an opinion on this facet whereas asking the regulator if there’s a requirement of approval from the shareholders of the holding firm which on this case is the corporate itself.
Sebi thought-about the submissions made by Bajaj Finserv in its letter and gave its opinion “with out essentially agreeing” with Bajaj Finserv’s interpretation of the Sebi rules on this concern. Within the extraordinary course of its enterprise, BAGIC, in conformity with the provisions of IRDAI’s governing common insurance coverage/reinsurance, has entered right into a Treaty with Allianz SE for reinsurance.Bajaj Finserv is listed on NSE and BSE.BAGIC, which is the unlisted common insurance coverage firm has 74% holding of Bajaj Finserv whereas the remaining 26% is held by Allianz SE
Sebi additional clarified that in case of any materially associated get together transaction involving a subsidiary, prior approval from the shareholders of the listed holding firm was mandatory. It additional mentioned that the transactions between a subsidiary and the associated get together of both the subsidiary or the holding listed firm fall underneath the definition of associated get together transactions.
Nevertheless, Sebi additionally mentioned that the steerage given by it’s primarily based solely on the precise queries raised by Bajaj FInserv. “Completely different info or circumstances would possibly result in a unique end result. This letter expresses the Division’s view and doesn’t categorical a choice of the Board on the query referred,” the Sebi letter mentioned.
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