InvestorQ : Why has SEBI exempted government from open offer in the Vodafone Idea case?
Rutuja Nigam made post

Why has SEBI exempted government from open offer in the Vodafone Idea case?

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2 months ago
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This open offer pertains to the stake in Vodafone Idea which the company is giving to the government in lieu of the outstanding dues of AGR and spectrum charges payable to the government of India. In a recent move, SEBI has exempted the government from making an open offer to shareholders of Vodafone Idea, as is normally required under the SEBI extant rules. Government will get 33% stake in lieu of AGR and spectrum dues to government.

Why did SEBI grant such an exemption? SEBI’s contention was that the sole intent of the action in this case was to protect the interests of small shareholders from losing their entire money by keeping Vodafone Idea afloat. It was not to acquire management control. It must be mentioned that the government stake will be classified as public shareholding. SEBI has also observed that since Vodafone Idea had large dues to the government, insisting on an open offer will be an additional burden on the government and indirectly to the public.
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