sebi:CO/91/TO/08/2003
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Facts / Headnote
Acquirer directed to make a fresh public announcement for 20% shares at Rs.23.75 per share with 15% p.a. interest from 16/11/99, and to pay balance of Rs.15 per share plus 15% p.a. interest to shareholders who accepted the 1999 offer; exemption application held not maintainable.
Provisions invoked
- s. 11B
- s. 3(1)
Regulations
- Reg. 7
- Reg. 4
- Reg. 36
- Reg. 3
- Reg. 16
- Reg. 2(1)
- Reg. 10
- Reg. 12
- Reg. 25
- Reg. 28
- Reg. 5
- Reg. 4(2)
- Reg. 44
- Reg. 2(1)(b)
- Reg. 2
- Reg. 3(1)
- Reg. 20
- Reg. 3(1)(l)
- Reg. 20(2)
- Reg. 20(2)(b)
Parties
- Acquirer
Holding
The Acquirer violated Regulation 20(2)(b) by failing to consider the Rs.23.75 per share price agreed for acquisition of 3,00,000 shares from HSIDC when determining the offer price, and violated Regulation 16(viii) by concealing the letter dated 15.4.99 and post-dated cheques. The Acquirer's exemption application under Regulation 4(2) was held not maintainable.
Full text
acquisition actually takes place. 5.0 Accordingly, letter of offer was sent to the shareholders of the Target company by the Acquirer containing the disclosures as advised by SEBI. The said offer opened on October 15, 1999 and closed on November 13,
of acquisition was not mentioned and in view of the complaints / court matter, SEBI vide its letter dated 15.12.99 inter alia advised the Acquirer to furnish the details regarding acquisition and not to proceed further with the open offer till further clearance from SEBI. 9.0 MCSIL vide letter dated 18.12.99 submitted the reply to SEBI’s letter dated 17.11.99 and , inter alia, confirmed that shares from HSIDC have not yet been acquired by the Acquirer. 10.0 On 29.2.2000, SEBI sought clarifications from MCSIL , inter alia, regarding the non-disclosure of submission of post dated cheques of Rs.71,25,466 by the Acquirer with HSIDC. 11.0 MCSIL vide letter dated 13.4.2000, inter alia replied that post dated cheques were not issued by the Acquirer to HSIDC as consideration. Further, the fact of post dated cheques having been issued to HSIDC was not brought to its notice by the Acquirers and the due diligence certificates issued by them were in order. 12.0 On 2.6.2000, SEBI advised HSIDC to clarify as to whether letter dated April 15, 1999 pertains to the buy-back of shares and whether the post dated cheques amounting to Rs.71,25,466/- were deposited with HSIDC as comfort / security for the buy back obligations or towards the purchase consideration of 3,00,000 shares held by HSIDC in the Target company. 13.0 On 20.7.2000, the Acquirer wrote a letter to SEBI seeking exemption under Regulation 3(1)(i) for a
23, 1993 with erstwhile promoters and the Acquirer categorically being placed in the footing of the erstwhile promoter. Further the Acquirer became the promoters as soon as they signed the Financial Collaboration Agreement dated April 19, 1999 and the position taken by SEBI that inter- se transfer between HSIDC and the Acquirer in terms of Financial Collaboration Agreement dated April 19, 1999 is not covered by Regulation 3(1) (i) is only a technical issue. 17.0 PANEL RECOMMENDATION The said application dated 18.8.2000 alongwith letter dated Nil from the Acquirer were forwarded to the Takeover Panel on 31.8.2000 and 5.9.2000 respectively, in terms of sub-regulation(4) of regulation 4 of the Regulations. The Takeover Panel vide its report dated 11.9.2000 recommended, inter alia, as under: “Taking the totality of circumstances into consideration, though strictly the Acquirers cannot be said to the promoters of the company at par with Vikas Garg & Associates, in view of the facts that – (i) The Acquirers have undertaken entire responsibilities and obligations of the said Vikas Garg & Associates under the Financial Collaboration Agreement dated January 04, 1993 entered by and between Vikas Garg & Associates and HSIDC; (ii) The Acquirers have been accepted as ‘Promoters’ of the Company by HSIDC; (iii) In the offer Documents making Public Announcement for acquisition of 20% of the Share Capital in voting rights of the Company, the Acquirers h
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Source: SecMarx — sebi:CO/91/TO/08/2003. 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.