sebi:WTM/KMA/CFD/418/07/2010
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Facts / Headnote
Acquirers held to have contravened Regulations 11(2) and 14(2); directed to disinvest 41,96,790 shares within two months and transfer profits, if any, to Investor Protection and Education Fund, with adjudication proceedings to be initiated separately.
Provisions invoked
- s. 11
- s. 19
Regulations
- Reg. 4
- Reg. 44
- Reg. 11
- Reg. 3
- Reg. 10
- Reg. 3(i)
- Reg. 4(2)
- Reg. 200
- Reg. 11(2)
- Reg. 44(a)
- Reg. 3(i)(l)
Parties
- Mr. S.R.B. Ramesh Chandra
- Mr. S. Chandra Mohan
- Mr. S Chandra Mohan (HUF)
- Ms. S. Laxmi Mohan
- Mr. S. Karthik Sarat Chandra
- Ms. Deepthi Sunethri
- S.R.B. Ramesh Chandra (HUF)
- Ms. Vimala Kumari
- Mr. S. Chatur Swaroop Chandra
- Ms. S. Dharini
- Mr. S. Kishore Chandra
- S. Kishore Chandra (HUF)
- Ms. S. Sasi Rekha
Holding
The acquirers contravened Regulations 11(2) and 14(2) by converting 41,96,790 warrants into equity shares on December 15, 2008, increasing holding from 69.11% to 74.01% without a public announcement. They were directed to disinvest 41,96,790 shares and face adjudication proceedings.
Full text
Page 2 of 9 credit the profits made, to the Investor Protection and Education Fund established under Regulation 3 of the Securities and Exchange Board of India (Investor Protection and Education Fund) Regulations 2009, should not be initiated against them for the violations of Regulations 11(2) and 14(2) of the Takeover Regulations.
Page 3 of 9 iv. No public announcement was made by the acquirers in respect of the aforesaid acquisition. The issue to be considered is whether the acquirers had contravened Regulations 11(2) and 14(2) of the Takeover Regulations as mentioned in the notice. The said Regulations are reproduced below for reference: Consolidation of holdings 11(1)………………. [(2) No acquirer, who together with persons acting in concert with him holds, fifty-five per cent (55%) or more but less than seventy-five per cent (75%) of the shares or voting rights in a target company, shall acquire either by himself or through [or with] persons acting in concert with him any additional shares [entitling him to exercise voting rights] or voting rights therein, unless he makes a public announcement to acquire shares in accordance with these Regulations: Provided that in a case where the target company had obtained listing of its shares by making an offer of at least ten per cent (10%) of issue size to the public in terms of clause (b) of sub-rule (2) of rule 19 of the Securities Contracts (Regulation) Rules, 1957, or in terms of any relaxation granted from strict enforcement of the said rule, this sub-regulation shall apply as if for the words and figures seventy-five per cent (75%), the words and figures ninety per cent (90%) were substituted. [Provided further that such acquirer may, [notwithstanding the acquisition made under regulation 10 or sub-regulation (1) of regulation 11,] without making a public an
Page 4 of 9 (2) In the case of an acquirer acquiring securities, including Global Depository Receipts or American Depository Receipts which, when taken together with the voting rights, if any already held by him or persons acting in concert with him, would entitle him to voting rights, exceeding the percentage specified in regulation 10 or regulation 11, the public announcement referred to in sub-regulation (1) shall be made not later than four working days before he acquires voting rights on such securities upon conversion, or exercise of option, as the case may be 3[:]
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Source: SecMarx — sebi:WTM/KMA/CFD/418/07/2010. 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.