sebi:WTM/RKA/ISD/131/2016
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Facts / Headnote
Representation/Miscellaneous Application made by Mr. Didwania vide letter dated August 31, 2016 is disposed off; clarifications issued regarding scope of confirmatory order dated August 26, 2016.
Parties
- Mr. Didwania
Holding
The confirmatory order dated August 26, 2016 does not restrict to whom securities may be sold, permits pledging of securities subject to paragraph 85(b)(ii), allows entities to avail corporate actions including subscribing to issuances, and permits purchase of shares as per paragraph 84(a). The representation/application of Mr. Didwania is disposed of accordingly.
Full text
Clarification to the confirmatory order dated August 26, 2016 Page 2 of 4 · What is going to be the application of the amount in the escrow account? · What is the market abuse that SEBI seeks to prevent or remedy by keeping the amount in escrow account? · How does keeping any amount in escrow account help prevent or remedy the apprehended market abuse, if any. xvi) The Applicant is the Chairman and promoter of Veritas India Limited which is a listed company and holds about 25% interest in this Company. Due to the SEBI Orders serious operational difficulties are being faced by the Company which in turn is adversely affecting the interest of investors and other shareholders in the company. The company has had plans for expansion into the business of manufacturing of PVC and storage tank terminal facility chemical and petrochemical products. The expansion will come at an approximate cost of $250 million but due to the Ex-parte Order investors and banks have held back their wallets awaiting for the outcome of these proceedings. SEBI has given no justification for an order that affects fund raising capabilities of the listed company which adversely affects the shareholders and is prejudicial to the interest of shareholders. The order punishes not only me but also the Company Veritas (India) Limited and its shareholders. I have received representations in this regard from shareholders of Veritas India Limited stating that they are adversely affected by your Honors ex-parte order. x
Clarification to the confirmatory order dated August 26, 2016 Page 3 of 4 interest bearing escrow account with a nationalized bank and 85 (b) allows the Applicant to utilize the sale proceeds lying in the escrow account “upto 25% of the value of the portfolio or the amount in excess of the profit made / loss incurred or value of shares purchased to give exit, whichever is higher, for business purpose and / or for meeting any other exigencies or address liquidity problems etc.” The Applicant states that as per para 16, Table V of the ex-parte ad-interim order dated April 17, 2015 the alleged profit made by the Applicant is approximately Rs. 3.85 crores. The current value of Veritas (India) Limited shares held by me itself is approx. 109.00 Crores. The Applicant had already submitted before your Honor that for the purpose of expansion of business of the listed company (Veritas), the Applicant may need to pledge his shares of the listed company (Veritas) where he is the promoter and Chairman and is NOT looking to sell his stake in the listed entity (Veritas). Your Honor has allowed the sale of securities which is in excess of the alleged profit booked for business purposes and other exigencies. I submit that there is no reason when the sale of securities in demat account is allowed for exigencies why pledge of securities for the benefit of listed company (Veritas) where the Applicant is a promoter should not be allowed. It is also submitted that, without prejudice to the right t
Clarification to the confirmatory order dated August 26, 2016 Page 4 of 4 entities and the prayers made by them vide various communications in that regard as noted in the confirmatory order. I note that the representation / application dated August 31, 2016 by Mr. Didwania has been received by SEBI after passing of the confirmatory order dated August 26, 2016. I also note that at this stage, there is no quasi-judicial proceeding pending before me in the matter of Mishka Finance and Trading Ltd. qua Mr. Didwania. However, for the purpose of administration and implementation of the directions issued vide the confirmatory
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Source: SecMarx — sebi:WTM/RKA/ISD/131/2016. 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.