sebi:WTM/KMA/CFD/285/07/2010
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Facts / Headnote
Adjudication proceedings directed to be initiated against the acquirers for failure to make public announcement within stipulated time; show cause notice dated April 28, 2010 disposed of.
Provisions invoked
- s. 19
Regulations
- Reg. 44
- Reg. 11(2)
- Reg. 14(2)
Parties
- Mr. G.R. Surana
- Mr. Shantilal Surana
- Mr. Vijayraj Surana
- Mr. Dineshchand Surana
- Mrs. Chandanbala Surana
- Mrs. Saraladevi Surana
- Mrs. Alka Surana
- Mrs. Vasantha Surana
Holding
The acquirers failed to make the public announcement within the stipulated time for their acquisition of 70,00,000 shares of Surana Industries Limited upon conversion of warrants, as required under Regulations 11(2) read with 14(2) of the Takeover Regulations, 1997. Adjudication proceedings are directed to be initiated against the acquirers for such violation.
Full text
Page 2 of 5 of the Takeover Regulations. SEBI had also noted that there was a delay in the public announcement of the offer made (on March 29, 2009) by the very same acquirers in respect of their acquisition of 30,00,000 equity shares of the target company on September 1, 2008, by way of conversion of 30,00,000 warrants.
Page 3 of 5 Regulation 14(2) of the Takeover Regulations is admitted. These factual details are not in dispute. As there was a delay in making the said public announcement, the acquirers have to pay to the shareholders whose shares have been accepted in public offer, the consideration amount along with interest, in terms of the provisions of the Takeover Regulations. The acquirers contended that the said delay was due to the delay in completing the earlier public announcement that they had made in respect of the acquisition of 30,00,000 shares (on September 1, 2008) of Rs.10/- each at a premium of Rs.140/- per share, aggregating to Rs.45 crores. The acquirers further stated that the public announcement for the said open offer was made on March 25, 2009 and after various submissions and clarifications to SEBI, the letter of offer could be dispatched to the shareholders only on December 24, 2009. According to the acquirers, it had taken them some time for arranging funds for the said public announcement and that the said open offer formalities were concluded only on February 11, 2010. As far as the second acquisition was concerned, the acquirers stated that they had applied to the Bankers for a Bank Guarantee for Rs. 11.25 crores each on behalf of Mr. G.R. Surana, Mr. Shantilal Surana, Mr. Vijayraj Surana and Mr. Dineshchand Surana. The said submissions would not come to their defence for not making the public announcement within the stipulated time. The requirement of making t
Page 4 of 5 upon conversion of 70,00,000 warrants allotted to them on September 29, 2008, as required in terms of Regulation 11(2) read with Regulation 14(2) of the Takeover Regulations. The show cause notice was issued against the acquirers contemplating any one or more or all the actions specified in Regulations 44 and 45(6) of the Takeover Regulations. As the acquirers had since made the public announcement and considering the case in its totality, according to me, the appropriate action against the acquirers is to initiate adjudication proceedings for not making the public announcement within the stipulated time. Therefore, I am of the view that the ends of justice would be met if adjudication proceedings are initiated against the acquirers, in respect of the said violations, as ordered hereinbelow.
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Source: SecMarx — sebi:WTM/KMA/CFD/285/07/2010. 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.