sebi:WTM/GM/EFD/73/2018-19

SEBI · SEBI · 2016-10-27 · G. Mahalingam, Whole Time Member

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

Facts / Headnote

Directions issued to Noticees to make a public announcement to acquire shares within 45 days and pay interest at 10% per annum to accepting shareholders

Provisions invoked

• s. 11B
• s. 19

Regulations

• Reg. 44
• Reg. 10
• Reg. 11(1)
• Reg. 2(1)(h)
• Reg. 2(1)(e)(2)
• Reg. 35(2)

Parties

• KDS
• ELT

Holding

The Noticees (KDS and ELT) were required to make a public announcement to acquire shares of the Target Company under regulation 11(1) of the SAST Regulations because their combined shareholding, as acquirer promoter and its person acting in concert, crossed the 55% threshold limit upon KDS's acquisition of 3.15% shares on August 18, 2010.

Full text

_____________________________________________________________________________ Order in the matter of Alchemist Realty Limited Page 2 of 9 accordance with the provisions of Clause 35 of the Listing Agreement. The combined shareholding of KDS and ELT in the Target Company, as on March 31, 2010 and March 31, 2011 stood at 53.91% and 57.06%. However, as per the shareholding pattern of the Target Company disclosed on the BSE, the Promoters and Promoter Group were shown to be holding only 42.30% and 45.45% shares, as on March 31, 2010 and March 31, 2011 respectively, which indicated that only the shareholding of KDS was shown under the promoters and promoter group category, as against the combined shareholding of KDS and ELT (i.e. 53.91% as on March 31, 2010 and 57.06 % as on March 31, 2011). The details of shareholdings of KDS and ELT and their combined shareholding in the Target Company over the years are as follows: Particulars KDS (Promoter) ELT (PAC) Total Shareholding

_____________________________________________________________________________ Order in the matter of Alchemist Realty Limited Page 3 of 9 such acquirer makes a public announcement to acquire shares in accordance with the regulations.” Since the abovementioned acquisition of 3.15% shares by KDS on August 18, 2010 had resulted in the combined shareholding of KDS and ELT (i.e. acquirer promoter and its PAC) crossing the threshold limit of 55% prescribed under regulation 11(1) of the SAST Regulations, KDS and ELT were required to make a public announcement to acquire shares of the Target Company in accordance with the provisions of the SAST Regulations. However, KDS and ELT had failed to do so.

_____________________________________________________________________________ Order in the matter of Alchemist Realty Limited Page 4 of 9 had transferred its entire shareholding in ELT to individual shareholders much before the abovementioned period, as per an agreement dated December 08, 2005 (Copy of agreement was enclosed with reply). To give effect to correct shareholding, ELT had duly accepted and registered the Share Transfer Deeds in its record and to ensure compliance, correct Annual Returns were filed with RoC which are showing the correct shareholding pattern in ELT (Copies of Annual Returns showing correct shareholding pattern in ELT for the years 2006 to 2011 were enclosed with the reply). Thus, ELT was not a promoter group company in the Target Company. (c) During the period from January 01, 2006 to March 31, 2011, ELT was holding shares of the Target Company as a non-promoter company and thus its shareholding was shown under non-promoter category by the Target Company in its filings with exchange under Clause 35 of the Listing Agreement for January 2006 to March 2010. Since KDS was not holding any shares in ELT during the abovementioned period, ELT could not be termed as a person acting in concert with KDS for the said acquisition. (d) Since the post-acquisition shareholding of KDS as on March 31, 2011 was only 45.45% which was within the threshold limit of 55% prescribed under regulation 11(1) of the SAST Regulations, the requirement of making a public announce

Source: SecMarx — sebi:WTM/GM/EFD/73/2018-19. 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.