sebi:WTM/KMA/CFD/281/07/2010
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Facts / Headnote
Exemption granted
Provisions invoked
- s. 19
Regulations
- Reg. 11
- Reg. 4(4)
- Reg. 11(1)
- Reg. 11(2)
- Reg. 4(6)
Holding
Exemption was granted to Mundra Credit and Investment Private Limited from Regulation 11(1) for the 1.72% increase up to 55% and from Regulation 11(2) for the 3.14% increase over and above the 5% limit, pursuant to the proposed buy-back by Consolidated Securities Limited.
Full text
Page 2 of 7 shareholding from 53.28% to 63.14% i.e. an increase by 9.86%. As the said increase would trigger Regulation 11(1) and (2) of the Takeover Regulations, the present application is filed seeking exemption from the applicability of the aforesaid Regulation 11(1) and (2) inter alia, on the following grounds:
Page 3 of 7 Foreign Institutional Investors / Non Resident Indians / Overseas Corporate Bodies. 12 92,336 2.31 Public 1084 16,78,101 41.91 Total 1099 40,03,800 100.00 33,78,800 100.00 * The acquirer/promoter holds shares in two separate demat accounts. Therefore, it is shown as two shareholders. 3.0 RECOMMENDATION OF THE TAKEOVER PANEL 3.1 The aforesaid application dated May 6, 2010 was forwarded to the Takeover Panel, by SEBI, in terms of Regulation 4(4) of the Takeover Regulations and the Takeover Panel vide report dated June 7, 2010 has recommended as under: “It was observed by the panel that the public shareholding after the buyback shall continue to be much above 25%, the minimum level of public shareholding. The buyback offer through the open market will provide an exit option to those public shareholders who desire to exit and will enhance overall shareholders value. Considering all these aspects the panel found the proposal to be in favour of the public shareholding and recommended exemption to the Acquirers from the applicability of regulation 11(1) and 11(2) of the Takeover Regulations subject to the Target Company/Acquirers complying with the relevant provisions of the Companies Act, 1956, SEBI Regulations and Listing Agreements.”
Page 4 of 7 stated in the application that the buy-back is proposed in line with the target company’s desire to enhance overall shareholders value. It was also stated that the buy-back would lead to reduction in outstanding number of equity shares. Even after the proposed buy-back (in case of 100% response), the public shareholding in the target company would remain at 36.86%. I note that, even after the proposed acquisition, the public shareholding in the target company would be at a level more than what is required for meeting the conditions for continuous listing. Thus, the minimum public shareholding requirement specified in Clause 40A of the Listing Agreement would not be breached by the proposed increase in shareholding of the acquirer. In terms of Regulation 11(1) of the Takeover Regulations, no acquirer who, together with persons acting in concert with him, has acquired, in accordance with the provisions of law, fifteen per cent or more but less than fifty five per cent of the shares or voting rights in a company, shall acquire, either by himself or through or with persons acting in concert with him, additional shares or voting rights entitling him to exercise more than five percent of the voting rights, with post acquisition shareholding or voting rights not exceeding fifty five per cent in any financial year ending on 31st March unless such acquirer makes a public announcement to acquire shares in accordance with the regulations. In the present case, the proposed in
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Source: SecMarx — sebi:WTM/KMA/CFD/281/07/2010. 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.