sebi:WTMO/34/CFD/08/2006

SEBI · SEBI · 2006-06-13 · T. C. Nair, Member

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Facts / Headnote

Exemption granted

Provisions invoked

• s. 19
• s. 77A

Regulations

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

Holding

SEBI granted Zee Telefilms Ltd. and Asian Satellite Broadcast Pvt. Ltd. exemption from making a public offer under Chapter III of the Takeover Regulations for their passive increase from 54.42% to 58.73% in ETC Networks Ltd. consequent to the target company's proposed buy-back.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ In the matter of acquisition of equity shares of ETC Networks Ltd Aug 04, 2006 | Orders : Orders of Chairman/Members SECURITIES AND EXCHANGE BOARD OF INDIA

The equity shares of the target company are listed on the Bombay Stock Exchange Ltd. (BSE) and the National Stock Exchange of India Limited (NSE). 1.2 Zee Telefilms Ltd. and Asian Satellite Broadcast Pvt. Ltd. (herein after referred to as are ‘the acquirers’) are the promoters of the target company and they collectively hold 54.42% of the paid up capital of the target company. 2.0 APPLICATION FOR EXEMPTION 2.1 Vide letter dated June 13, 2006, the acquirers 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, (hereinafter referred to as “the Takeover Regulations’). 2.2 In the said letter, the acquirers have stated that the target company has announced to buy-back upto 10% of its total paid up equity capital and free reserves at a price not exceeding Rs. 62/- share in compliance with the provisions of sections 77A and 77AA of the Companies Act 1956 and provisions of SEBI (Buy-Back of Securities) Regulations, 1998. In view of the said buy back, the holding of the acquirers would increase from 54.42% to 58.73% of the total paid up capital of the target company. As the shareholding of the acquirers would increase beyond 55% of the issued capital of the target company, the acquirers have sought exemption from the provisions of Chapter III of the Takeover Regulations. 3.0 GROUND FOR SEEKING EXEMPTION 3.1 The acquirers have inter a

same), will be at 58.73% of outstanding share capital of the target company, from the present 54.42%. c) Such an increase in the shareholding by the promoter group including the acquirers may trigger the provisions of regulations 10 and 11(1) of the Takeover Regulations. d) The acquirers are already in control of the target company. The acquirers do not propose to acquire any further shares. The acquirers are not participating in the said buy back. 3.2 Vide letter dated June 15, 2006, the acquirers have informed SEBI that the buy-back announced by the target company would reduce the paid up share capital and it would improve Earning Per Share (EPS). The said buy-back would also be beneficial to the shareholders in the form of higher dividend pay out and increased EPS. The acquirers have also enclosed a copy of the resolution passed by the Board of Directors of the target company detailing the rational benefits of the buy-back together with the public notice issued by the target company. 3.3 The shareholding pattern of the target company before and after the proposed buy back is as under: Share holders’ category Number of registered shareholders as on date of application Shareholding before the proposed acquisition Proposed Buy Back Shareholding after the proposed acquisition Number of shares/ total voting rights held % of shares / total voting capital held Number of shares Number of shares/ voting rights % of shares voting rights Promoter group 13 8141259 54.42 0 8141259 58.7

Source: SecMarx — sebi:WTMO/34/CFD/08/2006. 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.