sebi:WTM/RKA/EFD-DRA-III/29/2016
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Facts / Headnote
Directions issued requiring the noticees to make a public announcement to acquire shares of the target company within 45 days and pay interest at 10% per annum from March 23, 2010 to eligible shareholders tendering in the open offer.
Provisions invoked
- s. 11
- s. 19
Regulations
- Reg. 44
- Reg. 11
- Reg. 2(1)(e)
- Reg. 2(1)
- Reg. 10
- Reg. 12
- Reg. 14
- Reg. 14(1)
- Reg. 2(1)(b)
- Reg. 2(b)
- Reg. 2(1)(h)
- Reg. 20
- Reg. 32
- Reg. 2(1)(e)(2)
- Reg. 2(1)(e)(1)
- Reg. 32(1)(h)
Parties
- Mr. Apurva M. Shah
- Ms. Rashi Jain
- Ms. Ashni Shah
- Ms. Chanchal Jain
- Ms. Bhavna M. Shah
- Mr. Manish L. Shah
- Manish L Shah (HUF)
- Lalitchandra Shah
- Sumitra Lalitchandra Shah
- Mr. Kamlesh Sheth
- Nitin S. Gada HUF
- Mr. Nitin S. Gada
- Metex Marketing Pvt. Ltd.
Holding
The noticees, as promoters of the target company, collectively increased their shareholding from 12.77% to 25.20% on December 12, 2009 through conversion of warrants, exceeding the 15% threshold under regulation 10 of the Takeover Regulations, 1997, without making the required public announcement. Directions were issued requiring them to make a public announcement within 45 days and pay interest at 10% per annum to eligible shareholders.
Full text
Order in the matter of Koffee Break Pictures Ltd. Page 2 of 19 3. It was observed that pursuant to the conversion of warrants (earlier allotted to the promoter group amongst others) into equity shares of the target company, the collective shareholding of the promoter group had increased from 28,90,810 shares constituting 4.51% as on June 30, 2009 to 3,27,63,440 shares constituting 25.20% of the enhanced share capital of the target company as on December 31, 2009. The details of conversion of warrants into equity shares of the target company are as follows:
Order in the matter of Koffee Break Pictures Ltd. Page 3 of 19 Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as “the Takeover Regulations, 2011”) should not be issued against them. The following was, inter alia, alleged in the SCN:
Order in the matter of Koffee Break Pictures Ltd. Page 4 of 19 company in any manner whatsoever. The subscription to the shares of the target company was made through preferential allotment. (d) Metex was branded as a promoter with effect from December 2009 through acquisition of shares by way of allotment of shares upon conversion of preferential warrants. Metex did not act in concert with anyone. (e) As alleged in the SCN, the concept of persons acting in concert (PAC) does not apply to Metex as there was no any agreement or understanding between and among the preferential allottees to acquire the shares of the target company. There was no intention to acquire control over the target company and also there was no commonality of objective and commonality of interest that are the basic requirement of PAC. (f) Metex never intended to acquire any substantial shares/voting rights/control over the target company. This is evident from the fact that Metex never attended any general meetings of the target company nor did it exercise any voting rights at the meeting of the shareholders.
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Source: SecMarx — sebi:WTM/RKA/EFD-DRA-III/29/2016. 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.