sebi:WTMN/1/CFD/4/04
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Facts / Headnote
Asman Investments Ltd. debarrred from accessing the capital market or dealing in securities for a period of two years; adjudication proceedings under Section 15H of the SEBI Act initiated separately for failure to make public announcement
Provisions invoked
- s. 11
- s. 19
- s. 15H
Regulations
- Reg. 4
- Reg. 11
- Reg. 3
- Reg. 2(1)(e)
- Reg. 10
- Reg. 8
- Reg. 14
- Reg. 14(1)
- Reg. 44
- Reg. 11(1)
- Reg. 8(3)
- Reg. 8(2)
- Reg. 20
- Reg. 3(1)(f)
- Reg. 3(1)(e)
- Reg. 3(1)(l)
- Reg. 2(1)(e)(1)
Parties
- Asman Investments Ltd. (Lalbhai Group)
Holding
The Lalbhai Group's acquisition of 9.94% of equity shares from ICICI Bank Ltd. on 26.09.2002 could not be treated as a 'creeping acquisition' under Regulation 11(1) because the Hitachi Group were not persons acting in concert with them for that acquisition, and the acquisition therefore triggered Regulation 10 requiring a public announcement which was not made. Asman Investments Ltd. was debarrred from accessing the capital market or dealing in securities for two years.
Full text
2 held 35.2% and Hitachi India Pvt Ltd & Hitachi Ltd together held 35.2% in the paid up share capital of Target company, with the remaining 29.6% held by the public. Subsequently, Hitachi Ltd transferred its entire shareholding in the Target company to its 100% owned subsidiary, Hitachi Home and Life Solutions Inc on 01.04.2002. As a result, the collective shareholding of Hitachi Home and Life Solutions Inc. and Hitachi India Pvt. Ltd. {hereinafter collectively referred to as ”Hitachi Group”} became 35.2% in the Target Company.
3 the Takeover Regulations. In the event of the repurchase, the Acquirers’ shareholding would have gone up from 9.42% to 35.73% (i.e. more than 15%), thereby attracting the provisions of reg. 10 of the Takeover Regulations. The said application for exemption was forwarded to and considered by the Takeover panel and the panel did not find merit in recommending grant of exemption. The panel observed as under:- “On the facts stated in the application, the exemption is sought under Regulations 3(1)(f)(iv) and 3(1)(l) of the Takeover Code. Regulation 3(1)(f)(iv) of the Takeover Code has no application since it applies to acquisition of shares in the ordinary course of business by banks and financial institutions as pledge. No case is made out to recommend grant of exemption under Regulation 3(1)(l) of the Takeover Code. Hence, grant of exemption as sought is not recommended.”
4 Hitachi Group was not disclosed as PACs in any of the aforesaid disclosures. Similarly, the Hitachi Group made separate disclosures under sub-regulation (2) of regulation 8 of the Regulations and they also did not disclose Lalbhai group as a PAC. 1.7 Before taking a decision on the exemption application, the Lalbhai Group was given an opportunity of hearing before Chairman, SEBI on 16.09.2002. SEBI vide Order dated 16.10.2002 directed the Lalbhai Group that in the event of repurchase of the aforementioned shares from ICICI Bank Ltd, the Lalbhai Group would be required to comply with the provisions of regulation 10 of the Takeover Regulations i.e to make a public announcement to acquire shares of the Target company . 1.8 It was observed that in the meanwhile, Target company intimated to Bombay Stock Exchange (BSE) on 25.09.2002 inter alia that “The company has earlier obtained approval of Foreign Equity Participation up to 74%. Company has made an application to FIPB to revalidate and reinstate the earlier approval to facilitate increase in stake of the foreign partner. The promoters are at an advanced stage of discussion for the transfer of Lalbhai Group stake to Hitachi but the details are yet to be finalized. The transaction, if worked out, would be subject to eventual agreement between the two promoters and necessary regulatory approvals.” 1.9 Further, vide letter dated 26.09.2002, Lalbhai group along with the Hitachi group [stated to be persons acting in concert (PACs)]
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Source: SecMarx — sebi:WTMN/1/CFD/4/04. 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.