sebi:WTM/SM/IVD/ID2/13172/2021-22

SEBI · SEBI · 2017-03-15 · S. K. Mohanty, Whole Time Member

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Facts / Headnote

Charges established; Noticee directed to make public offer within 45 days, pay interest at 10% p.a., and debarred from securities market for 3 years

Provisions invoked

• s. 11
• s. 19

Regulations

• Reg. 44
• Reg. 11
• Reg. 199
• Reg. 10
• Reg. 12
• Reg. 14
• Reg. 200
• Reg. 22
• Reg. 35
• Reg. 45

Parties

• Sampada Chemicals Limited (Target Company); Noticee (promoter/acquirer)

Holding

The Noticee, having acquired shares taking its holding from 10.06% to 22.75% of Sampada Chemicals Limited without making a public announcement, violated regulation 10 read with regulation 14(1) of the Takeover Regulations, 1997, and was directed to make an open offer despite the target company having been compulsorily delisted.

Full text

Order in the matter of Sampada Chemicals Limited Page 2 of 11 c) As the Noticee was holding more than 10% of the shares of the Target Company as on March 31, 2011 and during the Financial year 2011-12, it had acquired 6,32,000 additional shares through off market mechanism, consequently, its shareholdings in the Target Company had become 22.75%. On account of the above acquisition, the Noticee became entitled to exercise fifteen percent or more of the voting rights in the Target Company and was required to make public announcement to acquire shares of the Target Company as stipulated under regulation 10 of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997 (hereinafter referred to as “‘Takeover Regulations, 1997’”). However, it was revealed that pursuant to the acquisition of shares that it acquired through off- market as mentioned above, the Noticee failed to to make public announcement required to be made in compliance with the regulation 10 of SEBI Takeover Regulations, 1997.

Order in the matter of Sampada Chemicals Limited Page 3 of 11 alleging violation of regulation 10 of Takeover Regulations, 1997, violation of regulation 11 (1) of Takeover Regulations, 1997 was alleged while issuing the SCN. Accordingly, a supplementary Show Cause Notice (hereinafter referred to as “Supplementary SCN”) was issued on January 20, 2021 to Noticee, in furtherance of the SCN dated March 15, 2017 modifying the alleged provisions in the SCN from regulation 11 (1) of the Takeover Regulations, 1997 to regulation 10 of the Takeover Regulations, 1997. For the purpose of convenience, SCN and Supplementary SCN are hereinafter collectively referred to as SCNs in this Order. I note from the records available before me that the Supplementary SCN was also duly served upon the Noticee through Speed Post, however, the Noticee for the reason best known to it has chosen to not file reply to the SCNs. Subsequently, in compliance with the principle of natural justice, an opportunity of personal hearing was accorded to the Noticee for which the date of hearing was fixed on August 12, 2021. I further note from the records available before me that the hearing notice dated June 29, 2021 for the aforesaid hearing date was served upon the Noticee through Speed Post, however, neither Noticee nor any Authorized representative appeared on behalf of the Noticee to dispel the allegation levelled in the SCNs and to present its side of story. I find that sufficient opportunities for personal he

Order in the matter of Sampada Chemicals Limited Page 4 of 11 7. I note that in the SCN, the acts of the Noticee in the scrip of the Target Company, have been alleged to be in violations of provisions of Takeover Regulations, 1997. Therefore, before moving forward on this issue, it would be proper to visit the afore- stated regulatory provisions alleged as to have been violated in the SCN. The said provisions are produced hereunder for ready reference: Takeover Regulations, 1997 Acquisition of fifteen per cent or more of the shares or voting rights of any company. 10.No acquirer shall acquire shares or voting rights which (taken together with shares or voting rights, if any, held by him or by persons acting in concert with him), entitle such acquirer to exercise fifteen percent or more of the voting rights in a company, unless such acquirer makes a public announcement to acquire shares of such company in accordance with the Regulations. Timing of the public announcement of offer

Source: SecMarx — sebi:WTM/SM/IVD/ID2/13172/2021-22. 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.