sebi:WTM/PS/141/CFD/JAN/2016
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Facts / Headnote
Interim order directions dated June 04, 2013 confirmed against the company, its directors, promoters and promoter group; order to remain in force till further directions.
Provisions invoked
- s. 19
- s. 21
- s. 12A
Regulations
- Reg. 14
Parties
- Shreevatsaa Finance & Leasing Limited
- Directors of Shreevatsaa Finance & Leasing Limited
- Promoters and promoter group of Shreevatsaa Finance & Leasing Limited
Holding
SEBI confirmed the interim order directions against Shreevatsaa Finance & Leasing Limited, its directors, promoters and promoter group for continuous non-compliance with minimum public shareholding (MPS) norms, and denied the company's requested exemptions from OFS and book building processes.
Full text
Page 2 of 5 (b) The Company submitted that even if it applies for termination of suspension of trading and thereafter make an offer for sale, there may be a situation that no investor is interested in buying its shares. (c) The Company submitted that it does not want to make a rights issue as it does not require funds and would become answerable to shareholders if it was not able to deploy such funds. The Company stated that its promoter group holds a total of 89.61% (promoter, Mr. Praveen Kumar Arora holds 79.22% and Agarni Leasing & Finance Pvt. Ltd. holds 10.39%). (d) The public shareholding is held by 59 investors holding 10.39% of share capital. (e) The Company also stated that as per the directions issued vide the interim order with respect to freeze of excess promoters’ holding, only 58.10% of the promoter holding would be frozen and requested permission to transfer the remaining 31.10% to the prospective investors so that it could achieve MPS.
Page 3 of 5 (e) The Company wishes to delist its shares from the stock exchange and therefore it would be cumbersome for the promoter to first reduce their promoter shareholding and then give exit opportunity for delisting. (f) According to the Company, the stock exchanges are charging very high fees for utilisation of their platform for undertaking the book building process and therefore it is economically not viable to undertake book building process for only 59 shareholders (public). (g) Mr. Praveen Kumar Arora, promoter, had subscribed to equity shares of Pine Animation Limited on preferential basis. SEBI vide Order dated May 08, 2015 put a freeze on the accounts of subscribers to equity shares issued under the preferential basis. The said promoter has been barred from undertaking transactions in the capital market. The Company is neither related to Pine Animation nor under the same management. The promoter would not be able to provide exit opportunity to the public shareholders of the Company. (h) In view of the above, the Company sought the following exemptions/permissions:
Page 4 of 5 provisions of rule 19A of the SCRR and Clause 40A of the Listing Agreement read with section 21 of the Securities Contract (Regulation) Act, 1956 ("SCRA"), by not maintaining atleast the minimum level (of 25%) of public shareholding as of June 03, 2013 (the time line before which such compliance was to be achieved). It is an admitted position that till date the Company is not compliant with the MPS norms as the public shareholding in the Company is at 10.38% (less than the minimum requirement of 25%). The Company has therefore failed to comply with the MPS requirements within the stipulated timeline and is also in continuous violation of these norms.
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Source: SecMarx — sebi:WTM/PS/141/CFD/JAN/2016. 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.