sebi:WTMO/TCN/CFD/125/JAN/2009

SEBI · SEBI · 2008-09-25 · Dr. T. C. Nair, Whole Time Member

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Exemption granted

Provisions invoked

• s. 19
• s. 77

Regulations relied on

• SEBI (SAST) Regulations, 1997 — 11(2)

Holding

The Whole Time Member granted the acquirers exemption from Regulation 11(2) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 with respect to the increase in shareholding and voting rights from 62.65% to 74.99% consequent upon the proposed buy-back by the target company.

Full text

2.3 On July 25, 2008, the Board of Directors of the target company passed a resolution under section 77(A)(2)(b) of the Companies Act, 1956 approving the proposed buy-back from the shareholders of the target company, the fully paid up Equity Shares of the target Company of the face value of Rs. 10/- each up to a limit of 25% of the total paid-up capital and free reserves of the target company and not exceeding 25% of the total paid-up equity capital in a financial year at a maximum price of Rs.120 per equity share. 2.4 Consequently, the Board of Directors, in their meeting held on 25th July, 2008, proposed to seek the shareholders’ approval by means of a Special Resolution through Postal Ballot and the notice of with respect to said resolution was dispatched on 14th August, 2008 to the shareholders of the target company. 2.5 The acquirers shall not sell any equity shares held by them in the proposed buy- back offer of the target company. In case of 100% response to the proposed buy- back offer of the target company, the voting rights of the acquirers would increase from 62.65% to 74.99%. 2.6 Since, the post buy-back shareholding of the acquirers may consequently trigger regulation 11(2) of the Takeover Regulations, the exemption has been sought by the acquirers under regulation 3(1)(l) read with regulation 4(2) of the Takeover Regulations, inter alia, on the following grounds:- (a) The acquirers are in control of the target company. There would be no change in control over th

2.8 The shareholding pattern of the target company before and after the proposed acquisition is as following:- Category No. of shares held % holding pre-buy- back No. of shares held post buy-back %holding post-buy- back Promoter’s holding 5081000 62.65 5081000 74.99 Non-Promoters Holding

3.0 CONSIDERATION OF THE APPLICATION BY THE TAKEOVER PANEL 3.1 The aforesaid application was forwarded by SEBI to the Takeover Panel in terms of sub-regulation (4) of Regulation 4 of the Takeover Regulations on October 01,

Source: SecMarx — sebi:WTMO/TCN/CFD/125/JAN/2009. 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.