sebi:WTM/PS/38/CFD/MAY/2016
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Facts / Headnote
Directions issued vide the interim order dated July 22, 2015 against Sayaji Hotels Limited, its directors, promoters and promoter group vacated with immediate effect; case referred for adjudication for delayed compliance with MPS norms.
Provisions invoked
- s. 19
- s. 21
- s. 23I
- s. 12A
Parties
- Sayaji Hotels Limited
- Raoof Razak Dhanani
- Anisha Raoof Dhanani
Holding
The interim order dated July 22, 2015 against Sayaji Hotels Limited, its directors, promoters and promoter group was vacated because the Company achieved compliance with the Minimum Public Shareholding (MPS) norms through Offer for Sale (OFS) on March 02 and March 03, 2016, with public shareholders holding 25.07%. However, the delayed compliance was held to be in violation of Rule 19A(2) of the SCRR read with Section 21 of the SCRA, 1956, and the case was referred for adjudication for imposition of suitable penalty.
Full text
Page 2 of 6 February 23, 2016, submitted the reply to the interim order, which was taken on record. The submissions made by the Company, in brief are as under:
Page 3 of 6 e. As the Company has bad dividend history and the Company has incurred losses in the financial year 2014-15, the rights issue might fail due to lack of response from existing shareholders. Further, bonus issue was not considered advisable in view of the Company‟s need for creation of reserves for operational purposes. f. The noticees had approached various Institutional Investors as well as merchant bankers for IPP. However, it was informed that due to factors like bad profit history, bad dividend history, recession in overall hoteling and catering industry, insignificant growth prospects, low volumes in trading, offloading by Clearwater Capital Partners LLC in 2013, death of main promoter Mr. Sajid Dhanani on November 11, 2012, no institutional investors were interested in investing into the Company. g. The noticees had approached various Institutional Investors personally but failed to convince them for investments into the Company. h. Before February 12, 2016, the noticees have tried several times to opt for OFS route, however, it failed due to various factors like the shares of the Company are infrequently traded and the number of trades per day are less than 10 trades. For successful OFS, they had to sell 8,75,000 shares against the average single day volume of 742 shares. The total shares traded during October 01, 2013 to October 31, 2015 (i.e. more than 2 years period) were only 32.50% of the total size of OFS. Therefore, it was not possible to sell 8,75,0
Page 4 of 6 1.52% of the total capital of the Company. On such dates the promoters had succeeded to off-load 2,40,658 shares constituting 1.37% of the Company‟s capital. Consequently the promoters shareholding in the Company has come down from 76.31% to 74.93%. According to the Company, it became MPS compliant pursuant to the said OFS. The Company requested SEBI to vacate the directions issued vide theinterim order dated December 10, 2015 considering the compliance of MPS norms and past efforts taken by the noticees.Vide the said letter, the Company also requested for an opportunity of personal hearing before passing any order in the matter.
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Source: SecMarx — sebi:WTM/PS/38/CFD/MAY/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.