sebi:VSS/AO-04/2008
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Facts / Headnote
Violation of regulation 10 read with regulation 14(2) of SAST Regulations, 1997 established for acquisition of 30,68,875 equity shares on December 11, 2003; Noticees held liable for monetary penalty under section 15H(ii) of SEBI Act
Provisions invoked
- s. 15
- s. 81
- s. 15H
- s. 15J
- s. 18
- s. 41
- s. 150
- s. 87(1)
Regulations
- Reg. 11
- Reg. 3
- Reg. 10
- Reg. 14
- Reg. 11(1)
- Reg. 21(1)
- Reg. 3(4)
- Reg. 20(4)
- Reg. 20(5)
- Reg. 14(2)
- Reg. 2(1)(k)
- Reg. 2(k)
- Reg. 3(1)(c)
- Reg. 20(11)
- Reg. 20(4)(c)
- Reg. 20(4)(b)
- Reg. 20(4)(a)
Parties
- Mr. Arun Kumar
- Mr. K. R. Ravishankar
- M/s. Arcolab (India) Pvt. Ltd.
- M/s. Caryl Pharma Pvt. Ltd.
Holding
Acquisition of 30,68,875 warrants on June 17, 2002 did not trigger regulation 10, but conversion into 30,68,875 equity shares carrying voting rights on December 11, 2003, which raised the Noticees' combined holding from 11.25% to 19.31%, triggered regulation 10 read with regulation 14(2). Exemption under regulation 3(1)(c) was unavailable as it stood omitted with effect from September 09, 2002, and the Noticees failed to make the required public announcement.
Full text
Page 2 of 29 3. The brief facts with regard to the issue and allotment of 30,68,875 warrants to the acquirers and the subsequent conversion of the said warrants into equity shares carrying voting rights are set out below:
Page 3 of 29 f. The paid up equity share capital of SAL, before the aforesaid allotment constituted 3,06,88,752 equity shares of the face value of Rs.10/- each, which after the conversion of 30,68,875 warrants into equity shares, became 3,37,57,627 equity shares of the face value of Rs.10/- each.
Page 4 of 29 3(4) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as ‘SAST Regulations’) to Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) nor made public announcement to acquire shares in pursuance of regulation 10 of SAST Regulations even though the shareholdings of the acquirers had crossed the threshold limit of 15% specified in regulation 10 of SAST Regulations. BSE vide its letter dated October 21, 2005 communicated the aforesaid observation to SEBI along with copies of letter of SAL dated October 11, 2005, notice of EoGM of SAL dated January 24, 2002, minutes of SAL’s EoGM dated March 18, 2002, resolution passed in the Board Meeting of SAL held on June 17, 2002 and minutes of Board Meeting of SAL held on December 11, 2003.
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Source: SecMarx — sebi:VSS/AO-04/2008. 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.