GB Global Limited – BSE Returns Amalgamation Scheme Citing Regulation 37 Of SEBI LODR

BACKGROUND

• GB Global Limited, a listed company (equity shares presently not traded), was admitted into Corporate Insolvency Resolution Process (CIRP) in September 2017.
• Dev Land & Housing Pvt Ltd (DLH) had submitted a resolution plan which was approved and sanctioned by Hon'ble NCLT in May 2021.
• Pursuant to resolution plan –
  • 90% of the exiting equity share capital of GB Global was reduced by way of cancellation of shares.
  • New shares worth INR 50 crores were issued to DLH by way of private placement, making DLH the holding company of GB Global with a total shareholding of 99.93%.

Brief on Scheme of Amalgamation

• A Scheme of Arrangement was filed with NCLT providing for merger of GB Global (Transferor Company) with Dev Land & Housing Private Limited (Transferee Company).
• In consideration of this Scheme –
  • No shares are to be issued to DLH, considering it is the Transferee Company;
  • Minority shareholders will get a two-fold exit –
    • cash consideration of INR 120 per share, which is higher than the per share fair value of GB Global as determined by the Valuer in Valuation Report.
    • 1 Redeemable Preference Share for every 1 share held by them. RPS shall carry a nominal dividend of 0.01% pa.
• GB Global will be delisted pursuant to this Scheme.
• The companies filed the Scheme with the Hon'ble NCLT, Mumbai bench, in August 2025.
• The Scheme Application was heard Hon'bleNCLT and was approved vide order dated 10 October 2025.

OBSERVATIONS OF THE STOCK EXCHANGES

• GB Global, being a listed company, filed the disclosure of the NCLT Order approving the Scheme Application with BSE and NSE on 17 October 2025, followed by a clarification on delay of the timing of the disclosure.
• Post such disclosure, BSE issued an observation letter dated 13 November 2025, flagging the following issues:
  • Non-compliance with Regulation 37 of SEBI (LODR) Regulations, 2015

Regulation 37 requires a listed entity to obtain prior approval / no-objection from the stock exchanges before filing a scheme of arrangement before the NCLT.

BSE observed that GB Global approached the Hon'ble NCLT without obtaining prior approval / no-objection from the Stock Exchange, which, as per BSE, constitutes a direct non-compliance with Regulation 37.

• Non-compliance with Minimum Public Shareholding (MPS) requirements BSE further observed that GB Global is not compliant with the Minimum Public Shareholding requirement of 25%, as prescribed under the Securities Contracts (Regulation) Act, 1957.
• Based on the above observations, BSE has returned the Scheme, stating that the procedural requirements under the SEBI LODR Regulations have not been complied with.
• The observation letter primarily hinges on the following:
  1. the alleged bypassing of the stock exchange approval process mandated under Regulation 37, and
  2. non-compliance with minimum public shareholding norms.

KEY TAKEAWAYS

• The Scheme arises in the backdrop of a CIRP-approved resolution plan, pursuant to which DLH already holds 99.93% of the equity share capital of GB Global.
• Even though the shares of the listed company were not traded, it is still required to comply with Regulation 37 of SEBI LODR and seek No-Objection Certificate from the stock exchanges.
• Merely because the company was acquired pursuant a resolution plan under IBC process, the requirement to obtain No-Objection Certificate from stock exchanges in case of any scheme of arrangement and to ensure minimum public shareholding still continues to apply.

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