sebi:EAD/KS/AA/AO/01/2017-18
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Penalty of Rs. 25,00,000 imposed under Section 15HB of the SEBI Act
Provisions invoked
- s. 15
- s. 15H
- s. 161
Regulations
- Reg. 4
- Reg. 3
- Reg. 17
- Reg. 15
- Reg. 14
- Reg. 22
- Reg. 3(1)
- Reg. 24
- Reg. 13(1)
- Reg. 22(1)
- Reg. 24(1)
- Reg. 2
- Reg. 22(2)
- Reg. 2(1)(p)
Holding
The Noticee violated Regulation 13(1), Regulation 24(1) and Regulation 22(1) read with Regulation 22(2) of the SAST Regulations, 2011, and a monetary penalty of Rs. 25,00,000 under Section 15HB of the SEBI Act was imposed.
Full text
Page 2 of 17 (Procedure for Holding Inquiry and Imposing Penalty by Adjudicating Officer) Rules, 1995 (hereinafter referred to as the “Adjudication Rules”) to inquire into and adjudge under section 15HB of the SEBI Act for the alleged violations of provisions of Regulation 13(1), Regulation 24(1) and Regulation 22(1) read with Regulation 22(2) of the SAST Regulations, 2011 by the Noticee. Subsequently, I have been appointed as Adjudicating Officer, in the present matter, vide order dated May 18, 2017.
Page 3 of 17 b) It was also observed that representatives of the Noticee were appointed as Additional Directors on the Board of the target company as below:
Page 4 of 17 Further, I find that a notice dated July 07, 2015 addressed to BSE Ltd. under the Listing Agreement by the target company stated that: “….The Board at its meeting held today took on record the transfer of Sale Shares from the Sellers to the Acquirer and the receipt of the consideration for the same…” The said notice also stated that: “…Pursuant and in accordance with Regulations 22 and 22(2A) of the Takeover Regulations, the Acquirer has deposited 100% of the offer size in the escrow account... Accordingly, the Acquirer having complied with Regulations 22 and 22(2A) of the Regulations, has consummated the SPA and taken over the company...” In this regard, I note that as per Regulation 22(1) read with Regulation 22(2) of the SAST Regulations, 2011, the acquirer shall not complete the acquisition of shares or voting rights in, or control over, the target company until the expiry of the offer period unless the acquirer deposits in the escrow account cash of an amount equal to one hundred per cent of the consideration payable under the open offer. In the instant case, the Noticee deposited only 1% of the consideration payable under the open offer in cash in the escrow account while giving bank guarantee for the remaining 99%. The Noticee then completed the acquisition of shares and took over of the target company before expiry of open offer. In view of the same, it was alleged that the Noticee had violated Regulation 22(1) read with Regulation 22(2) of the SAST Regul
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.
Source: SecMarx — sebi:EAD/KS/AA/AO/01/2017-18. 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.