Minebea Mitsumi settles takeover norms violation case with Sebi

New Delhi: Minebea Mitsumi Inc has settled with Sebi a case of alleged delay in making a public offer in respect of the acquisition of shares in Jay Ushin Ltd, on payment of a little over Rs 17 lakh towards settlement charges.

This comes after Minebea Mitsumi approached the Securities and Exchange Board of India (Sebi) to settle the case. Consequently, Sebi, through a settlement order passed on April 19, said "the proceedings that may have been initiated for the defaults ... be settled qua the applicant".

Besides, the regulator said it will not initiate enforcement action against the applicant for the said defaults. The case pertains to alleged delay in making a public offer in respect of the acquisition of shares in Jay Ushin (target company) resulting in the alleged violation of Sebi's SAST (Substantial Acquisition of Shares and Takeovers) Regulations. According to the Sebi order, Minebea Mitsumi (applicant), which is a company incorporated in Japan, in a meeting of its board of directors held on November 7, 2018 resolved to make a tender offer, under the relevant laws of Japan, to acquire all of the issued shares of the common stock of U–Shin, which holds 26 per cent stake in Jay Ushin. Subsequently, U–Shin undertook a share consolidation exercise, making the applicant the sole shareholder in U- Shin. Prior to the transactions, Minebea Mitsumi did not hold any shares/voting rights/control in Jay Ushin.

But pursuant to the transactions, the applicant became entitled to indirectly exercise voting rights and control over the target company and thus triggered the requirement to make an open offer under SAST Regulations, the order noted. The open offer was made only on May 20, 2020 to acquire 10,04,770 shares constituting 26 per cent of the voting share capital of the target company at a price of Rs 589.94 per share. The per share amount included the interest at the rate of 10 per cent from November 7, 2018 (date of intention to acquire control over the target firm) till May 28, 2020 (date of publication of detailed public statement to the shareholders of the target company), it added. Pursuant to the application, Minebea Mitsumi, in December 2020, had proposed to settle the case by paying settlement charges. Thereafter, Sebi's High Powered Advisory Committee, in January 2021, considered the proposed settlement terms made by the applicant and recommended the case for settlement upon payment of Rs 17.06 lakh.