sebi:WTMO/29/CFD/07/2006

SEBI · SEBI · 2005-12-31 · Dr. T. C. Nair, Whole Time Member

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Facts / Headnote

Exemption application rejected; application disposed of

Provisions invoked

• s. 19

Regulations

• Reg. 4
• Reg. 6
• Reg. 7
• Reg. 13
• Reg. 10
• Reg. 25
• Reg. 15
• Reg. 4(2)
• Reg. 3(1)
• Reg. 20
• Reg. 20(4)
• Reg. 20(5)
• Reg. 4(6)
• Reg. 28
• Reg. 28(5)

Parties

• Shri Hitesh G. Somani
• Ms. Namrata Kabra
• Ms. Geetaben Kabra

Holding

The Whole Time Member rejected the acquirers' request for exemption from the requirements of making a public announcement, appointing a merchant banker, and related provisions of the Takeover Regulations in connection with their proposed acquisition of 1,56,900 shares of Agarwal Holdings Limited. The proposed acquisition triggers regulations 10 and 12, obligating the acquirers to make a public announcement in accordance with the Takeover Regulations.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ Proposed Acquistion of Equity Shares of Agarwal Holdings Limited Jul 14, 2006 | Orders : Orders of Chairman/Members SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: Dr. T. C. Nair, WHOLE TIME MEMBER IN THE MATTER OF PROPOSED ACQUISITION OF EQUITY SHARES OF AGARWAL HOLDINGS LIMITED WTMO/29/CFD/07/2006 DATE OF HEARING: 14.06.2006 Appearances: For Acquirers: Shri Keyoor Bakshi, Company Secretary 15236 24 9 1. 2. 3. 4. 5. 6. 7. 1

i). Making public announcement and publication of the same in newspapers. (Regulations 10 and 12 read with regulation 15 of the Regulations). ii). Appointment of Merchant Banker. (Regulation 13 of the Takeover Regulations). iii). Authorizing merchant Banker to operate / issue instructions relating to escrow account. [Regulation 28(5) of the Takeover Regulatio 3.0 GROUNDS FOR SEEKING EXEMPTION 3.1 The acquirers have sought the exemption as stated above inter alia submitting the following: a) The acquirers are carrying on the business of finance and investment and real estate business since long. The acquirers intend to e the business of finance and investments in an organized manner in a listed public company and also plan to expand the busine target company which is engaged in the business of investment and finance. b) The issued , subscribed and paid up capital of the target company is Rs. 40,00,000/- divided into 4,00,000 equity shares of Rs. 1 The total paid up equity share capital of the target company will remain the same before and after the proposed acquisition. c) Size of the target company is very small and if the exemption is not granted, it would involve huge expenditure which would further acquisition unviable. d) The shares of the target company are infrequently traded in terms of Explanation (i) of regulation 20(5) of the Takeover Regulati opening and closing price of last trade in the shares of the target company at BSE on August 17, 2005, was Rs. 4.60. The net

of Shares and Takeovers) Regulations, 1997, (hereinafter referred to as “the Takeover Regulations’). 2.2 The acquirers vide their subsequent letters dated February 11, 2006 and March 24, 2006, made further clarifications in respect of the said exemption application. It is submitted by the acquirers that they are not holding any shares in the target company and they propose to acquire 1,56,900 (39.22%) equity shares carrying voting rights of the target company by way of purchase of shares from its existing promoters and additional 80,000 (20%) equity shares of the target company by making individual offers to the public shareholders of the target company. 2.3 The shareholding pattern of the target company before and after the proposed acquisition is as under: Shareholders category Number of registered shareholders as on date of application Shareholding Before the proposed acquisition Shareholding After the proposed acquisition No. of shares/ total voting rights held % of shares total voting capital held No. of shares/ voting rights % of shares / voting rights Promoter group 1,56,900 39.22% ----- ----- Acquirers ----- ----- 2,36,900 59.22% FIIs ---- ----- ----- ----- Public 2,43,100 60.78% 1,63,100 40.78% Total 4,00,000 100% 4,00,000 100%

Source: SecMarx — sebi:WTMO/29/CFD/07/2006. 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.