sebi:WTM/PS/39/CFD/OCT/2014
Facts / Headnote
Interim directions dated June 04, 2013 revoked; matter referred for adjudication proceedings under sections 23E and 23H of the SCRA
Provisions invoked
- s. 19
- s. 21
- s. 23I
- s. 12A
Regulations relied on
- Equity Listing Agreement — 40A
- SCRR, 1957 — 19(2)(b)
- SCRR, 1957 — 19A
Parties
- Steelco Gujarat Limited
- Directors of Steelco Gujarat Limited
- Promoters and promoter group of Steelco Gujarat Limited
Holding
The interim directions issued against Steelco Gujarat Limited, its directors, promoters and promoter group on June 04, 2013 are revoked since the company has now complied with the minimum public shareholding (MPS) requirements, but the matter is referred for adjudication proceedings under sections 23E and 23H of the SCRA for the approximately 14-month delay in compliance.
Full text
Page 2 of 4 Industrial and Financial Reconstruction ("BIFR") in August 2001, which resulted in the increase of promoter's shareholding from 26.33% to 78.26%. (d) All the equity shares held by the promoter was pledged with the Consortium Lender Bankers in terms of the approved Corporate Debt Restructuring Scheme ("CDR Scheme") on June 27, 2012. (e) Equity shares of the Company are being traded below par value since long and were being traded below Rs.4.60/- since last six months. (f) The Company has earned a meagre net profit of Rs.17.03 lakhs for the year ended March 31, 2013 as against whopping net loss of Rs.2870.59 lakhs for the previous year ended March 31,
Page 3 of 4 had undertaken an Offer for Sale (OFS) on the BSE. In this OFS, which opened on June 30, 2014, the promoter could off-load only 39,711 shares resulting in the reduction of promoter shareholding from 78.26% to 78.17%. The Company also stated that its promoter intends to undertake another OFS to reduce the remaining 3.17% excess shares for complying with MPS requirements. These submissions were reiterated by the authorised representatives, who also requested that the personal hearing be adjourned by 30 days. In the further hearing held on August 07, 2014, the representatives of the Company orally submitted that in the second OFS, the promoter was able to successfully off-load the remaining excess shareholding. The Company was advised to provide proof for the same along with written submisisons, if any.
Page 4 of 4 10. On considering the facts and circumstances of this case, I do not find the reasons/submissions offered by the Company with respect to its delay in complying with the MPS requirements, as plausible. However, as the Company has now complied with the MPS requirements as stipulated under rule 19A of the SCRR read with clause 40A of the listing agreement, it would be appropriate and reasonable to vacate the directions issued against the Company, its promoters and directors. In view of the delay of about 14 months in complying with the MPS requirements by the Company, I am of the considered view that the matter be referred for adjudication proceedings under sections 23E and 23H of the SCRA.
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Source: SecMarx — sebi:WTM/PS/39/CFD/OCT/2014. 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.