sebi:CO/167/TO/09/2002

SEBI · SEBI · 2002-02-19 · G.N. Bajpai, Chairman, Securities and Exchange Board of India

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Show-cause allegations dropped for 12.04.2000 acquisition; held no indirect acquisition of control of SEAMEC and no obligation to make public announcement

Provisions invoked

s. 11B
s. 356
s. 355

Regulations

Reg. 4
Reg. 11
Reg. 3
Reg. 2(1)(c)
Reg. 16
Reg. 2(1)(e)
Reg. 10
Reg. 12
Reg. 14
Reg. 4(2)
Reg. 29
Reg. 14(1)
Reg. 14(3)
Reg. 44
Reg. 45
Reg. 2
Reg. 22
Reg. 27
Reg. 3(1)
Reg. 2(1)(e)(2)

Parties

Technip
IFP
ISIS

Holding

Technip was not acting in concert with ISIS and IFP when it acquired 29.68% shares/voting rights of Coflexip from Stena on 12.04.2000, and therefore did not indirectly acquire 58.23% voting capital/control of SEAMEC so as to trigger regulations 10 and 12.

Full text

on 12.04.2000 and were in a position to control Coflexip. (iii) in view of the nature of cross holdings amongst Technip, ISIS & IFP, the composition of Board of Directors of Coflexip, Technip & ISIS and the control exercised by ISIS along with TotalFina ELF & Gaz de France over Technip decisions, prima facie, Technip and ISIS (Second largest Shareholder in Coflexip) were persons acting in concert in terms of regulation 2(1)(e) of the Regulations. Further, Technip along with ISIS were acting in concert with the common objective of acquiring control over Coflexip. (iv) after the said acquisition of 29.68% shares of Coflexip held by Stena, Technip along with person acting in concert i.e. ISIS enjoyed 47.85% voting rights in Coflexip and had 6 directors on the Board of Coflexip comprising 11 directors on 12.04.2000 and were in a position to control Coflexip. (v) therefore, after the acquisition of shares of Coflexip held by Stena on 12.4.2000, Technip along with person acting in concert i.e. ISIS acquired control over 100% subsidiary of Coflexip namely Coflexip Stena Offshore (Mauritius) Ltd. which owned 58.23% of voting capital in SEAMEC. As a result of the aforesaid acquisition, Technip acquired 58.23% voting capital of SEAMEC and control over SEAMEC and triggered the provisions of regulations 10 & 12 of the said Regulations. (vi) as Technip along with persons acting in concert have acquired the said shares/voting rights and control of SEAMEC in the manner as stated above witho

forwarded a letter to Coflexip which briefly stated the following and the same was a legally binding undertaking, enforceable in the French Courts: (i) Technip was not acting in concert with any one with respect to Coflexip and had no plan relating to any such concerted action; (ii) Technip has no intention to increase the interest they will take in Coflexip before April 19, 2001; (iii) Technip agrees not to sell or otherwise dispose of any shares before October 19, 2000; (iv) Technip agrees that any sale or disposition of 1,839,398 Coflexip shares between October 19, 2000 and August 19, 2001 to any person other than institutional investors would be subject to Coflexip's right upon receipt of 21 days prior notice to substitute a purchaser of Coflexip's choice other than a direct competitor of Technip ; (v) Technip informs Coflexip that these restrictions on sales and other dispositions would not apply in the event of a public offer by any other person for Coflexip shares and would terminate if a third party, acting alone or in concert with others, became the owner of 20% or more of the share capital or voting rights of Coflexip or if a reorganisation of Coflexip businesses resulted in its then current business lines representing less than 65% of its consolidated net sales without the agreement of Technip representatives on Coflexip's board of directors. (vi) Technip agrees that, until the earlier August 11, 2001 and the date on which Technip interest in Coflexip constituted l

The Statement ﬁled by Technip pursuant to the Companies Act was further reinforced by a commitment made by Technip directly to Coflexip to the same effect; such commitment was mentioned in the press release of 12 April 2000. 3.2.13 Furthermore, without prejudice to the foregoing submissions even under the provisions of the said Regulations "control of" Coflexip was not acquired by Technip in April, 2000. For the purpose of acquiring control under the said Regulations, it is necessary that Technip should have acquired the right to appoint a majority of directors of Coflexip or a right to control the management or policy decisions of Coflexip or should have acquired control by virtue of a Shareholder's Agreement or in any other manner. As explained by their dated the 14 November, 2001, the same was not the case. In fact, Technip has given undertakings which were ﬁled with the relevant authorities in France, stating that for a period of 12 months, they did not intend to take control of Coflexip. Technip had not therefore, acquired control of SEAMEC. 3.2.14 Whether one person or a group of persons controls a company is essentially a question of fact. Certain situations or circumstances may raise doubt or suspicion but whether in fact there has been any acting in concert has to be established. The facts set out above and in particular the fact that by the statement of intent ﬁled formally in France it was assured that Technip would not for 1 year from April 2000 take control of Co

You have read the preview. Create a free account to read the full order, track this party, and analyse it in Ontology.

Free accounts include 10 searches/day with full order access.

Analyse this matter in Ontology · Plans

Source: SecMarx — sebi:CO/167/TO/09/2002. 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.