sebi:WTMO/136/CFD/03/2005

SEBI · SEBI · 2004-11-08 · Madhukar, Whole-Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Conditional exemption granted from regulation 15 only; other exemptions refused

Provisions invoked

• s. 19

Regulations

• Reg. 10
• Reg. 15
• Reg. 4(2)
• Reg. 4
• Reg. 21
• Reg. 20
• Reg. 24

Holding

The acquirer M/s Arani Agro Oil Industries Limited is granted exemption from complying with regulation 15 regarding public announcement for the proposed acquisition of 2,48,000 equity shares of Shricon Industries Limited, subject to conditions. Exemption from escrow account, submission of letter of offer and other Chapter III requirements is refused.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER IN THE MATTER OF PROPOSED ACQUISITION OF SHARES OF SHRICON INDUSTRIES LIMITED – EXEMPTION APPLICATION FILED UNDER REGULATION 4(2) OF THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 1997.  WTMO/136/CFD/03/2005 1.0       BACKGROUND 1.1       Shricon Industries Limited. (hereinafter referred to as ‘the target company’) is a public limited company incorporated under the Companies Act, 1956, having its registered Empire House, 3 Floor, 214, Dr. D.N. Road, Fort, Mumbai 400 001. 1.2       The equity shares of the target company are listed on The Stock Exchange, Mumbai.    2.0       APPLICATION FOR EXEMPTION 2.1           M/s Arani Agro Oil Industries Limited (hereinafter referred to as ‘the acquirer’) through their authorized merchant banker, M/s. Sobhagya Capital Options Ltd (hereinafter re as ‘the merchant banker’) made an application dated 08.11.04 under regulation 4(2) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 (he referred to as ‘the Takeover Regulations’), which was revised vide letter dated 24.11.2004 removing certain discrepancies observed in the original application. The said app filed seeking exemption from the compliance of Chapter III of the Takeover Regulations including exemption from making public announcement, submission of letter of provisions of escrow account with respect to the proposed acquisition of 2,48,000 equity

3.4     Consequent to the above, the acquirer will acquire 2,48,000 equity shares representing 20% of the paid capital of the target company with a face value of Rs.10 each at a Rs.15/ per share, through public offer in terms of regulations 10 and 12 read with regulation 21 of the Takeover Regulations. The proposed acquisition is for the purpose of ac control and management over the target company. 3.5     In respect of the said acquisition of 2,48,000 (20%) equity shares, the acquirer has sought exemption from making a public announcement, submission of Letter of Of provisions of Escrow Account in terms of Takeover Regulations. The exemption is sought in view of the following: <!--[if !supportLists]-->i.        <!--[endif]-->There are only 97 shareholders under the “Public” category. <!--[if !supportLists]-->ii.      <!--[endif]-->Open offer is not expected to evince much response.  The individual intimations to the very few members will ensure better resp advertisement in all editions of three papers serves no purpose than to burden the acquirers financially which resources can be profitably deployed in turning around t Moreover the members are not scattered and are located in specific pockets only.

hereinabove and that the acquirer has appointed Merchant Banker to oversee the entire process, as per the provisions of the Takeover Regulations. In this regard I agree submission that individual intimations to the 97 members will serve the purpose under the facts and circumstances of the case provided the acquirer fulfills the condi mentioned in para. 5.1.     6.3            I find that the acquirer has undertaken to acquire only 55% from the promoters instead of 63.09% as initially proposed.  As per this undertaking the shareholding pattern in th company before and after the proposed acquisition would be as under:

Source: SecMarx — sebi:WTMO/136/CFD/03/2005. 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.