sebi:WTM/GA/120/SAST/0/07

SEBI · SEBI · 2006-05-24 · G. Anantharaman, Whole Time Member

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Facts / Headnote

Exemption granted from Regulation 11(1)

Provisions invoked

• s. 19
• s. 81
• s. 173

Regulations

• Reg. 4
• Reg. 4(2)
• Reg. 11(1)
• Reg. 3(5)
• Reg. 3(4)
• Reg. 3(1)

Holding

Exemption was granted to Shri Suneel Gupta and Sangeeta Gupta from complying with Regulation 11(1) of the Takeover Regulations for the proposed preferential allotment of 35,00,000 equity shares of Ashnoor Textile Mills Ltd., subject to compliance with undertakings in letters dated July 21 and August 12, 2006.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER IN THE MATTER OF PROPOSED ACQUISITION OF EQUITY SHARES OF ASHNOOR TEXTILE MILLS LTD. – EXEMPTION APPLICATION FILED UNDER REGULATION 4(2) OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS ) REGULATIONS, 1997 1.0 BACKGROUND 1.1       Ashnoor Textile Mills Ltd. (hereinafter referred to as ‘the target company’) is a company limited by shares incorporated under the Companies Act, 1956, having its registered Gurgaon, Haryana-110016. The equity shares of the target company are listed on the Delhi Stock Exchange Association Ltd. (DSE), the Bombay Stock Exchange Ltd. (B Jaipur Stock Exchange Ltd. (JSE) and the Ludhiana Stock Association Ltd. (LSE). 1.2       Shri Suneel Gupta and Smt. Sangeeta Gupta (hereinafter referred to as ‘the acquirers’) are the promoters of the target company and are holding 28.49% of the total paid u of the target company. The acquirers proposed to acquire 35,00,000 equity shares of the target company, through preferential allotment . Pursuant to the said proposed pre allotment and the acquisition of shares of the target company, the shareholding of the acquirers would increase from 28.49% to 52.29% of the paid up capital of the target co 2.0 APPLICATION FOR EXEMPTION 2.1 The acquirers ,vide letter dated May 24, 2006 filed an application with Securities and Exchange Board of India (hereinafter referred to as SEBI) under regulatio

company are listed on the Delhi Stock Exchange Association Ltd. (DSE), the Bombay Stock Exchange Ltd. (BSE), the Jaipur Stock Exchange Ltd. (JSE) and the Ludhiana Stock Association Ltd. (LSE). 1.2       Shri Suneel Gupta and Smt. Sangeeta Gupta (hereinafter referred to as ‘the acquirers’) are the promoters of the target company and are holding 28.49% of the total paid up capital of the target company. The acquirers proposed to acquire 35,00,000  equity shares of the target company, through preferential allotment . Pursuant to the said proposed preferential allotment and the acquisition of shares of the target company, the shareholding of the acquirers would increase from 28.49% to 52.29% of the paid up capital of the target company.  2.0 APPLICATION FOR EXEMPTION 2.1 The acquirers ,vide letter dated May 24, 2006 filed an application with Securities and Exchange Board of India (hereinafter referred to as SEBI) under regulation 4(2) read with regulation 3(1) (l) of the SEBI (Substantial Acquisition of Shares and Takeover)   Regulations,   1997   (hereinafter   referred   to   as   the   Takeover Regulations), seeking exemption from the applicability of regulations 11(1) of the Takeover Regulations with respect to their proposed acquisition of 35,00,000 equity shares of the of the target company, by way of preferential allotment. 2.2 In the said application, the acquirers have inter alia made the following submissions: -  a) that their shareholding in the target company is 28.49

d) that due to the adverse financial position, the target company was unable to repay its outstanding loans along with the interest to the lenders. e) that the target company reached a settlement with HFC and Bank of Maharashtra in 2004.  f) that the target company had also approached IDBI for the One Time settlement (OTS) of the debt due to IDBI. In 2005, the target company submitted its final proposal  for  the  OTS  based  upon  which  the  IDBI  had  agreed  to  settle  the outstanding  loan  amount  at  Rs.5.75  Cr  to  be  paid  in  the  15  equal  monthly installments by waiving off the principal of Rs.2 crores, 100% simple interest of Rs.926 cr and 100% FILD of Rs.12.55 cr. That in the proposal submitted by the target company, it has been committed that the funds for the settlement shall be brought in by the promoters and through their own sources.  g) that in compliance of the said condition, the promoters are required to bring funds towards repayment of loan amount.  h) that  the proposed exemption is driven by the objective of rehabilitation of the target company and the said rehabilitation shall help in reviving the interest of 20,000 shareholders of the target company .  i) that there is no change in control of the target company.  2.3 The  shareholding pattern of the target company before and after the proposed preferential allotment ( and also after the reduction in capital ), in terms of the aforesaid application is as under: Name of Shareholders Pre issue sha

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