A German holding company, in order to undertake some internal restructuring of business units, decided to transfer its substantial shareholding in an Indian listed company Styrolution ABS (India) Ltd., held through one of its subsidiaries based in the UK, to another subsidiary in Singapore. They sought informal guidance from SEBI regarding whether such inter se transfers would be exempt from open offer obligations under the takeover regulations.

The takeover regulations provides that inter se transfers amongst a company, its subsidiaries, its holding company and other subsidiaries of such holding company are exempted. SEBI in its informal guidance, provided some clarity on whether a foreign company and its foreign subsidiaries can also avail of this benefit. While the definition of 'company' does not include a body corporate incorporated outside India, SEBI observed that, the definitions of 'Holding Company' and 'Subsidiary' under Section 4 of the Companies Act, 1956, includes such body corporates. Hence, SEBI found that such transfers will fall within the ambit of the general exemptions provided within the takeover regulations.