sebi:16983

SEBI · SEBI · 1999-04-28 · G.N. Bajpai, Chairman, SEBI

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Facts / Headnote

Acquirer directed to make public announcement under Chapter III in terms of Regulations 10 and 12 taking 28/4/99 as reference date within 45 days and to pay interest @15% per annum from 27/8/99 till actual payment

Provisions invoked

• s. 11B
• s. 293
• s. 32
• s. 3(1)

Regulations

• Reg. 6
• Reg. 11
• Reg. 2(1)(c)
• Reg. 16
• Reg. 10
• Reg. 12
• Reg. 14
• Reg. 5
• Reg. 14(1)
• Reg. 14(3)
• Reg. 44
• Reg. 45
• Reg. 2(1)(b)
• Reg. 3(1)(j)
• Reg. 2
• Reg. 1
• Reg. 22
• Reg. 27
• Reg. 22(8)

Parties

• Luxottica Group S.p.A

Holding

The Acquirer violated Regulations 10 and 12 read with Regulations 14(1) and 14(3) by failing to make a public announcement within four working days of the 28.04.1999 Purchase Agreement agreeing to acquire 44.152% shares/voting rights and control of the Target company. The Acquirer was directed to make a public announcement under Chapter III taking 28/4/99 as reference date within 45 days with 15% per annum interest from 27/8/99 till actual payment.

Full text

1.2 Bausch & Lomb South Asia Holdings Inc., a Delaware corporation, USA, is 100% subsidiary of Bausch & Lomb Inc., a New York corporation, U.S.A (hereinafter referred to as the "Seller"). 1.3 Bausch & Lomb India Holding Limited, a company incorporated in USA is 100% subsidiary of Bausch & Lomb South Asia Holdings Inc. Bausch & Lomb India Holding Limited held 44.152% shares/ voting rights in the Target company. 1.4 Luxottica Group S.p.A is a company incorporated in Italy and is listed on New York and Milan Stock Exchanges.(hereinafter referred to as the "Acquirer"). 1.5 Rayban Holding Inc., a Delaware corporation, U.S.A is a wholly owned subsidiary of the Acquirer. 1.6 The holding pattern of the Seller and the Acquirer is given below : 1.7 On 6th September 2001 SEBI received a complaint vide letter dated September 6, 2001, inter alia, stating that the Seller and the Acquirer had entered into an agreement dated 28.4.99 wherein Sunglass business of the Seller world wide was sold to the Acquirer and consequently the Acquirer has acquired shares representing 44.152% of the paid up capital of the Target company and has thereby triggered the provisions of the Substantial Acquisition of Shares and Takeovers Regulations, 1997 (hereinafter referred to as the ‘said Regulations’). 1.8 On receipt of the aforesaid complaint, the Target company and the Acquirer were called upon vide letter dated 25 September, 2001 and letter dated 27 September, 2001 respectively, to provide the factual deta

same, the said acquisition of control is covered under regulation 2(1)(c) of the said Regulations; (ii) a public announcement to acquire a minimum of 20% shares was to have been made by the Acquirer in terms of regulation 14(1) read with regulation 14(3) of the said Regulations within 4 working days from the date of entering into agreement i.e April 28, 1999; (iii) the Acquirer has acquired the said shares/voting rights and control of Target Company in the manner as stated above without making a public announcement as required under the provisions of the said regulations, they have therefore, prima-facie, violated the provisions of regulations 10 & 12 read with regulation 14(1) & 14 (3) of the said Regulations and are therefore, liable for penal action under the said Regulations and Securities and Exchange Board of India Act, 1992 (hereinafter referred to as " the SEBI Act"); (iv) in view of the aforesaid why one or more or all action(s) under regulation 44 and regulation 45 of the said Regulations and Sections 11, 11B,15H & 24 of the SEBI Act, should not be initiated against them for violations specified therein. 2.2 The Acquirer submitted its reply to the abovesaid show cause notice vide their letter dated 5 March,2002. 2.3 Thereafter a personal hearing was granted to the Acquirer on 30 May, 2002. 3.0 SUBMISSIONS OF THE ACQUIRER The submissions made by the Acquirer vide their letters dated 22.1.02 & 5.3.02 and during the hearings granted to them on 16.1.02 and 30.5.02 are g

to the Purchase Agreement. In order for it to spin off the Business which was the subject matter of the auction sale, it was necessary for Seller to take various steps with reference to various countries and places in which the Business was carried on, depending upon the circumstances, the format of the Business and the applicable laws. 3.3 The conclusion that pursuant to the agreement dated April 28th, 1999 ("Global Agreement") Acquirer is "an "Acquirer" in terms of regulation 2(1)(b) and the said acquisition of control is covered under regulation 2(1)(c) of the Regulations" is incorrect since the Purchase Agreement does not set out a definitive agreement to acquire, and was, on the contrary, subject to a series of conditions, to happen both in India and elsewhere, the satisfaction of which was uncertain both legally and factually and since, even if their satisfaction eventually would be possible, the time required for such possible satisfaction was entirely unpredictable at the time the Purchase Agreement was entered into. 3.4 The Purchase Agreement sets out that so far as concerns the global transaction (other than India), it was to be undertaken in four separate and distinct stages, the satisfaction of each of which was a pre-condition to the creation of any purchase obligation under the Agreement. The aforesaid steps in brief are as follows :- The first step of the Purchase Agreement which was the pre- condition of any further step under the Agreement was the satisfactio

Source: SecMarx — sebi:16983. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.