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2. CORAM: Justice Tarun Agarwala, Presiding Officer Justice M. T. Joshi, Judicial Member Ms. Meera Swarup, Technical Member Per: Justice Tarun Agarwala, Presiding Officer (Oral)

1. The appellants have filed separate appeals but the issue is common and consequently all the appeals are being decided together by a common order. All the appellants are aggrieved by the order dated May 12, 2022 passed by Securities and Exchange Board of India ("SEBI" for convenience) allowing the exemption application under Regulation 300 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("ICDR Regulations" for convenience) exempting Tamilnad Mercantile Bank Limited (hereinafter referred to as "the Bank") from strict compliance of the ICDR Regulations.

2. We have heard Dr. Abhishek Manu Singhvi, the learned senior counsel, Shri M. S. Krishnan, the learned senior counsel and Shri Janak Dwarkadas, the learned senior counsel for the appellants and Shri Pradeep Sancheti, the learned senior counsel, Shri Akash Rebello, the learned counsel and Shri Somasekhar Sundaresan, the learned counsel for the respondents.

3. The facts leading to the filing of the present appeals are that the shareholders of the Bank passed a special resolution in terms of Section 62(1)(c) of the Companies Act, 2013 on October 28, 2020 giving consent, approval and sanction for allot up to 1,58,40,000 equity shares of the Bank of face value of Rs. 10/- each pursuant to a fresh issue of equity shares and pursuant to the provisions of Section 28 of the Companies Act also gave consent and approval to transfer up to 71,25,570 equity shares, out of the issued and paid up share capital of the Company by way of an Offer for Sale ("OFS") by certain existing equity shareholders of the Bank who were eligible for OFC in accordance with the SEBI ICDR Regulations. The shareholders further resolved that the Board of Directors of the Bank would have the right to make such modifications to the size of fresh issue, offer for sale and/ or Pre-Initial Public Offering ("IPO") placement as may be necessary without seeking any further consent or approval from the shareholders of the Bank.

8. In the meanwhile, six shareholders of the company representing 12,505 shares of the Bank filed an application to the Bank requesting for withdrawal of their OFS. Their request was accepted by the Board of Directors by passing a resolution on May 11, 2022. By the same resolution, the Board of Directors further resolved to make an application to SEBI to seek an exemption from filing fresh DRHP in accordance with the ICDR Regulations and further resolved that consequent changes to the DRHP already filed would be submitted for SEBI's review and response.

20. We are further of the opinion, that SEBI follows a disclosure based regime and does not regulate on merits or approve an offer document such as the DRHP but only mandates true and fair adequate disclosures. The Bank withdrew the OFS. The application of the Bank seeking exemption from strict enforcement from Regulation 300 of the ICDR Regulations for withdrawal of OFS without filing a fresh DRHP under Section 25(6) read with Schedule XVI (f)(ii) of the ICDR Regulations was considered in accordance with the aforesaid provisions with a view to ensure that adequate disclosures in the DRHP is made to enable the investors to make an informed decision.