sebi:WTMO/08/CFD/05/2006

SEBI · SEBI · 2006-02-02 · T. C. Nair, Whole Time Member (WTM)

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Facts / Headnote

Application for exemption from regulations 10 and 11 of the Takeover Regulations rejected

Provisions invoked

• s. 19

Regulations

• Reg. 4
• Reg. 6
• Reg. 4(2)
• Reg. 10
• Reg. 3
• Reg. 4(6)
• Reg. 3(1)(l)

Holding

SEBI rejected the application for exemption from the applicability of regulations 10 and 11 of the Takeover Regulations with respect to the proposed preferential allotment of 45,00,000 and 5,00,000 shares of Vas Animations and Entertainment Ltd. to the acquirer and the PAC.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ In the matter of Proposed Acquisition of Equity Shares of Vas Animations and Entertainment Ltd May 19, 2006 | Orders : Orders of Chairman/Members SECURITIES AND EXCHANGE BOARD OF INDIA

1.1 Vas Animations and Entertainment Ltd. (hereinafter referred to as ‘the target company’) is a company limited by shares incorporated under the Companies Act, 1956, having its registered office at Mumbai. The equity shares of the target company are listed on the Bombay Stock Exchange Ltd. 1.2 Smt. Sangeeta Jayesh Valia (hereinafter referred to as ‘the acquirer’) belongs to the promoter group of the target company, which holds 20.10% of the total paid up capital of the target company. The acquirer together with Shri Chintan Kanakia, who is a non promoter of the of the target company (hereinafter referred to as ‘PAC’) propose to acquire 45,00,000 shares and 5,00,000 shares of the target company , respectively, on preferential allotment basis, at the face value of Rs. 10 each, amounting to Rs. 5,00,00,000. Pursuant to the proposed preferential allotment, the promoter holding would increase from 20.10% to 55.05% of the paid up equity capital of the target company. 2.0 APPLICATION FOR EXEMPTION 2.1 The target company vide letter dated February 02, 2006 filed an application, ,with the Securities and Exchange Board of India (SEBI) under regulation 4(2) read with regulation 3(1)(l) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997, (Takeover Regulations), on behalf of the acquirer and the PAC seeking exemption from the applicability of regulations 10, 11 of the Takeover Regulations with respect to the proposed preferential allotment of 50,00,000 shares

plastic, since the applicant company is clamouring for diversification of activities. d. the target company is carving out to come out of the losses by diversification without taking any risk of other line of activity which is strange and absolutely new to the directors of the and can make use of the existing infrastructure of Metal Shapers to the fullest extent astutely and effectively. e. the buying of the running business for the target company is useful and helpful to the Metal Shapers, as the said business unit when purchased by the target company gets the status of corporate level and this enhances the vision and also the bargaining capacity of borrowings with Bank and Financial Institutions, as banks and Financial Institutions are loathe in granting finance to partnership firms and thus the growth of business in partnership firm gets stymied . 2.3 The shareholding pattern of the target company before and after the proposed preferential allotment is as under: Shareholders’ category Number of registered shareholders as on date of application Before the proposed acquisition After the proposed acquisition No. of shares/total voting rights held % of shares/ total voting capital held No. of shares/ total voting rights % of shares/total voting rights Promoter Group 5 1005144 20.10% 1005144 10.05% Acquirers 2 1) Mrs. Sangeeta Jayesh Valia 2) Mr. Chintan Harshad Kanakia 45,00,000 5,00,000 45% 5% FLs/Banks -- -- -- -- --

Source: SecMarx — sebi:WTMO/08/CFD/05/2006. 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.