sebi:WTMO/13/CFD/11/03
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Facts / Headnote
Application rejected
Provisions invoked
- s. 19
Regulations
- Reg. 4
- Reg. 6
- Reg. 10
Holding
The application of Shri Mukesh Kumar Agarwal for exemption from Regulations 10 and 12 in respect of his proposed acquisition of shares of Comp-U-Learn Tech India Ltd was rejected.
Full text
3.0 SUBMISSIONS IN THE EXEMPTION APPLICATION In the aforesaid application and subsequent correspondence exchanged with SEBI, the Acquirer, inter-alia, submitted as under: 3.1 The intended transfer share is inter-se between the promoters and therefore the provisions of regulation 10 and 12 of the said regulations are not applicable. 3.2 It was already mentioned in the Prospectus that both the transferor and transferee are promoters. Sri KRC Sekhar is basically a businessman. In order to assist the promoters in setting up the project, he also joined as promoter of the company and contributed towards the capital. However, in view of the depressing markets for software industry for quite some time, he desired to dispose off his shares. In this regard Sri Mukesh Kumar Agarwal, who is another promoter, director functioning from USA has agreed to acquire those shares, as they are very cost effective for him. However, this transaction will not have any bearing on the management and control of the company. 4.0 CONSIDERATION OF THE APPLICATION 4.1 The said application dated April 30, 2003 was forwarded to the Takeover Panel in terms of sub-regulation (2) of regulation 4 of the Regulations. The Takeover Panel observed that the transferor and transferee have not been named as “promoters” in the prospectus dated June 8, 2000 for public issue of shares of the Target Company. Accordingly, an explanation was sought by SEBI from the acquirer. In its
se between the promoters, refused to grant any exemption to the acquirer as requested by him. The Takeover Panel observed that “The Acquirer made the application originally on the basis that the intended transfer of shares is inter-se between the promoters and the provisions of the Takeover Code are not applicable. However, on pursuing inquiry with the Acquirer, it is now evident and even admitted by the Acquirer that the intended transfer of shares is not inter-se between the promoters. This shows that the Acquirer originally sought exemption on the basis of statements which to the knowledge of the Acquirer, to say the least, were wrong. That apart, since no case for grant of exemption as sought is made, recommendation for grant of exemption from making open offer is not made”. 4.2 SEBI vide its letter dated September 12, 2003 forwarded the copy of the recommendation of the Takeover Panel to the acquirer and also granted an opportunity of personal hearing on October 07, 2003. The acquirer vide his letter dated October 06, 2003 requested SEBI to adjourn the hearing and the same was adjourned to November 05, 2003. Shri A. N. Sarma, Company Secretary in practice, appeared before me on behalf of the acquirer and made the submissions. 4.3 The representative of the acquirer submitted before me that the transaction intended was between the promoters inter-se and therefore the acquirer is entitled to avail the benefit of exemption from regulation 10 an
Regulations. ORDER 5.1 Having regard to the above, and the recommendations made by the Takeover Panel and also in the interest of the public shareholders of the Target company, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act 1992 read with sub-regulation (6) of regulation 4 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 , hereby reject the application of Shri Mukesh Kumar Agarwal , the Acquirer seeking exemption from applicability of Regulations 10 and 12 of the said Regulations in respect of his proposed acquisition of the shares of Comp – U- Learn Tech India Ltd. 5. 2 This order shall come into force with immediate effect.
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Source: SecMarx — sebi:WTMO/13/CFD/11/03. 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.