sebi:WTM/PS/59/CFD-DCR/DEC/2014
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Facts / Headnote
Noticees directed jointly and severally to make public announcement to acquire minimum 20% of voting capital of target company as directed vide SEBI Order dated January 15, 1999, with interest at 10% per annum from date of liability till payment to shareholders holding shares on date of violation whose shares are accepted, after adjusting dividend if any.
Provisions invoked
- s. 24
- s. 81
- s. 15H
- s. 18
- s. 8(1)
Regulations
- Reg. 11
- Reg. 10
- Reg. 12
- Reg. 44
- Reg. 11(1)
- Reg. 3(4)
- Reg. 35
- Reg. 3(1)(c)(i)
- Reg. 3(1)(c)
- Reg. 44(f)
- Reg. 23(1)(b)
- Reg. 3(1)(c)(2)
- Reg. 32(i)(h)
Parties
- Fawn Trading Co. Pvt. Ltd.
- Fern Trading
- Willow Trading
- Tejashree Trading
- Pallor Trading
Holding
The five noticees failed to satisfy the mandatory disclosure and reporting conditions in regulation 3(1)(c)(ii) and 3(4) for preferential allotment exemption, so regulations 10, 11 and 12 were triggered and they are jointly and severally liable to make a delayed public announcement for minimum 20% with 10% p.a. interest.
Full text
Page 2 of 28 (b) The target company convened an Annual General Meeting (AGM) on December 12, 1997 inter alia to pass a resolution under section 81(1A) of the Companies Act, 1956, to allot in the course of domestic and/or international offering, equity shares of `10/- each for a total of `400 crores including premium, at a price to be decided as per SEBI Guidelines on Preferential Issues, but not less than `30/- per share; to such class of persons being Indian financial institutions, banks, foreign companies, investment bankers, development institutions, mutual funds, FIIs, members, promoters or their associates etc, as the Board may decide, in one or more combinations thereof and in one or more tranches and on such terms and conditions incidental thereto. The resolution was passed in the AGM.
Page 3 of 28 required under regulation 3(1)(c)(ii) were not disclosed in the notice calling for the General Meeting ; (3) accordingly the regulations become applicable and the noticees were liable to make offer to the remaining shareholders of the target company; (4) price to be in accordance with the Takeover Regulations. In the interests of the shareholders of the target company and the securities market, SEBI vide the above order had directed the noticees to make a 'public announcement to acquire shares from the remaining shareholders (other than the promoters, their associates and person acting-in concert) of the target company an aggregate minimum of 20% of voting capital of the target company within a period of two months of the Order at a price in accordance with the regulations'.
Page 4 of 28 3. Pursuant to the Order of the Hon'ble High Court, Fawn, vide letter dated April 14, 2011, filed representation (which was on behalf of all five noticees) before SEBI, wherein the following
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Source: SecMarx — sebi:WTM/PS/59/CFD-DCR/DEC/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.