sebi:WTM/PS/62/CFD/NOV/2013
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Facts / Headnote
Interim order dated June 04, 2013 vacated against Vaarad Ventures Limited, its directors, promoters and promoter group, subject to revival conditions
Provisions invoked
- s. 19
- s. 32
- s. 12A
Parties
- Vaarad Ventures Limited
Holding
SEBI vacated the interim order dated June 04, 2013 against Vaarad Ventures Limited, its directors, promoters and promoter group, on the ground that the Company is a sick company with an approved rehabilitation scheme under BIFR and Section 32 of SICA gives overriding effect to such schemes. The directions shall revive automatically if the promoter shareholding is not reduced to 75% or less and public shareholding not increased to 25% within three months of the Company coming out of BIFR purview.
Full text
Page 2 of 3 b. The holding of the promoters has increased due to the rehabilitation, restructuring and the merger of the Company pursuant to the sanctioning of the scheme under SICA. c. Despite exemption, it had examined the options available in order to dilute the promoter's holdings. However, the methods available were not found to be viable due to the market conditions and infrequently traded scrip.
Page 3 of 3 promoter group, with immediate effect. However, the directions issued vide the SEBI Order dated June 04, 2013, shall immediately be revived (without the need for passing of a separate order) against the said Company, its directors, promoters and the promoter group, if - a. the promoter shareholding in Vaarad Ventures Limited, is not reduced to 75% or less, within a period of three (3) months from the date when the said Company comes out of the purview of BIFR; and b. Vaarad Ventures Limited, fails to increase its public shareholding to the minimum 25% as stipulated under rule 19A of the SCRR, within three (3) months from the date it comes out of the purview of BIFR.
4. I have considered the replies of the Company and the submissions made during the personal hearing. I note that the Company was a sick company for which the BIFR had sanctioned a rehabilitation scheme. I have also perused the order pertaining to the proceedings held on June 25, 2007, passed by BIFR and the sanctioned rehabilitation scheme. I note that as per the sanctioned scheme, the Company had agreed for amalgamation of one Atcomaart Limited with it. For the same, the Company had to issue three equity shares at par against each share held by the shareholders of Atcomart Limited. I note that the Company/ promoters and the new investors had requested for exemption from takeover/ creeping acquisition/ preferential allotment/ limits on promoters holding under SEBI Act/ Rules/ Guidelines etc. or any other concerned body from any deeds and acts which the Company and new investors may undertake to give effect to the rehabilitation scheme. The Company had also requested for exemption from maintaining the guideline of minimum public holding during the rehabilitation period which includes allotment/ transfer/ conversion/ dilution of shares/ warrant during the restructuring period. I note that the scheme which inter alia contains the aforesaid clauses and is still in force/ implementation has been approved.
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Source: SecMarx — sebi:WTM/PS/62/CFD/NOV/2013. 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.