There is no clear answer to the question since there is no clarification of what constitutes “indirect ownership” under the Securities Law 2019. In particular, among other circumstances, according to Article 35.1(a) of the Securities Law 2019, the tender offer regulations are triggered when (emphasis added):
Any investor and its related persons (except in case the investor and its related persons are investment funds and fund management companies) intend to purchase voting shares which results in the direct or indirect ownership of 25% or more of the total outstanding voting shares of a public company.
It is not clear whether:
The first reference to “voting shares” refers to voting shares of the relevant public company (the target company) or could refer to voting shares of any company; and
Owning shares of a company which owns shares in the target company could be considered as indirect ownership of shares in the target company.
Therefore, the above tender offer requirement may apply even to an investor who purchases shares of a private parent of a target company (such parent, Private Parent), if such purchase resulting in such investor having indirect ownership of shares in a target company which reaches the 25% threshold. For example, where a Private Parent holds 25% of the total shares of the target company, then if an investor intends to acquire a controlling shareholding or 100% of the Private Parent, such investor may be required to make a tender offer since after the acquisition it will indirectly own 25% of the target via the Private Parent.
On the other hand, other regulations on tender offer suggest that the tender offer requirements only apply to an investor who purchases shares of the target company being a public company resulting in the ownership of the target company’s shares achieving the prescribed thresholds:
Article 3.25 of Decree 155/2020 defines “tender offer” as an organization or individual’s publication of the proposed acquisition of a part of or all the voting shares of a public company or fund certificates of a closed investment fund in accordance with law for the purpose of ensuring fairness for shareholders or investors of the target company or target investment fund. “Target company” is also defined as “a public company with the shares which are the subject of the tender offer” under Article 3.26 of Decree 155/2020; and
Another circumstance under which tender offer is triggered is where an investor and its related persons holding 25% or more of the voting shares in 01 public company intend to make further purchases which results in the direct or indirect ownership reaching or exceeding 35%, 45%, 55%, 65%, 75% of the total outstanding voting shares of 01 public company (Article 35.1(b) of the Securities Law 2019). This suggest that the investor must intend to purchase shares in the target company being a public company.
However, if the tender offer regulations under the Securities Law 2019 is interpreted to only involve the case where an investor and its related person intend to purchase shares of the target company, then the wordings “indirect ownership” would be redundant under Article 35.1(a) and 35.1(b) of the Securities Law 2019, because in such cases both the investor and its related persons will always have direct ownership of the target company’s shares as a result of such purchase.