Download - Takeover panorama october 2014
Takeover Panorama A Monthly Newsletter by Corporate Professionals
Year VIII- Vol VIII
October Edition
2
Legal Update
SAT order in the matter ofMr. Hemant Kothari, Mr. Rajesh
Kothari, Mr. Dharmendra Kothari, Mrs. Ichraj Devi Kothari and
Mrs. Sunita Kothari
SAT order in the matter ofMr. Vilas Valunji, Mr. Partha Debnath,
Mr. Janardhan Shriniwas Purandare and Mr. V. A. Norhi
SAT order in the matter of M/s. Akriti Global Traders Limited
Consent Order in the matter of M/s. Count N Denier
(India)Limited
Consent Order in the matter of M/s. Macor Packaging Limited
Consent Order in the matter of M/s. Potential Investments and
Finance Limited
Consent order in the matter of Shri Niwas Leasing and Finance
Limited
Exemption Order in the matter of M/s. Sarla Performance Limited
Adjudicating Officer/WTM Orders
3
Latest Open Offers
12
Regular Section
Automatic Exemption from Open Offer
15
Market Update
19
Our Team
20
Insight
3
The Hon’ble Tribunal held
that the penalty imposed
is very less as compared
to what prescribed in
Regulation and
dismissed the appeal.
SAT order in the matter of Mr. Hemant Kothari, Mr. Rajesh Kothari,
Mr. Dharmendra Kothari, Mrs. Ichraj Devi Kothari and Mrs. Sunita
Kothari
Facts: Mr. Pradeep Kumar Kothari (“Acquirer”) had acquired
6,83,717 equity shares representing 19.53% of the paid up
capital of M/s. Kwality Credit & Leasing Limited (“Target
Company”/”KCLL”) but failed to make public announcement
as required under Regulation 10 of SEBI (SAST)
Regulations, 1997read with Regulation 35 of SEBI (SAST)
Regulations, 2011.Accordingly SEBI imposed a penalty of
Rs. 40 lacs on Mr. Hemant Kothari, Mr. Rajesh Kothari, Mr. Dharmendra Kothari, Mrs. Ichraj
Devi Kothari and Mrs. Sunita Kothari(hereinafter referred to as “Appellants”) for the aforesaid
violation being aggrieved by the direction of SEBI, the Appellants have filed the appeal
before Hon’ble Tribunal and contended that:
Penalty imposed is very high and unreasonable and is imposed without considering the
mitigating factors.
Appellant were ready to comply with the open offer and in pursuance to that they either
appointed BCB Brokerage Private Limited as the manager to open offer.
Total acquisition cost of 6,83,717 shares of KCLL is only Rs.34,18,585/-, whereas, penalty
imposed on appellants is Rs.40 lacs which is totally disproportionate.
There was no trading in shares of Target Company since 2007 to October 19, 2011.
SEBI Takeover Regulations Advisory Committee has published its report on July 19, 2010
wherein it is recommended that the threshold limit be increased to 25% from 15%.
As per SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2014, the
total indicative amount for such violation is Rs.25 lacs only.
There is no change in the Control and Management of the Company.
Issues: Whether the penalty imposed by the SEBI is justified?
LEGAL
UPDATES
4
The Hon’ble Tribunal held that
Obligation to make disclosures as
per SEBI (SAST) Regulations, 2011
and SEBI (PIT) Regulations, 1992
arises on perusal to the acquisition
of shares irrespective of the fact
that the shares are acquired
through open market purchase or
on pursuant to scheme of
amalgamation.
Decision: After taking into considerations all the facts and circumstances of the case, the
Hon’ble Tribunal held the following
With reference to the intention to make open offer, no open offer has been made till date by
the Appellants, so contention made by the Appellants that they are ready to comply with the
open offer is purely unacceptable.
With reference to the imposition of penalty by the SEBI, Hon’ble Tribunal held that in case of
failure to make open offer there is a penalty of Rs. 25 crores or three times the amount of
profit made out of such failure, though SEBI only imposed the penalty of Rs. 40 lacs which
cannot be considered as unreasonable. Accordingly after taking in to consideration all the
facts and order in the matter of Unijules Life Sciences Ltd. Vs SEBI, SAT dismissed the
appeal.
SAT order in the matter ofM/s. Akriti Global Traders Limited
Facts: The present appeal is filed by M/s Akriti
Global Traders Limited (“Appellant”) shareholder of
M/s SRS Real Infrastructure Limited (“Target
Company”) against the order passed by SEBI
(“Respondent”) imposing a penalty of Rs. 4,50,000
for violation of Regulation 29(1) read with
Regulation 29(2) read with Regulation 29(3) of SEBI
(SAST) Regulations, 2011 along with Regulation
13(1) read with 13(3) and 13(5) of SEBI (PIT)
Regulations, 1992.
Brief facts of the case:
On February 14, 2013, Appellant had received 14,85,735 equity shares representing 0.74%
of the total equity capital of the Target Company resulting in increase in the shareholding of
Appellant from 4.71% to 5.45% equity share capital.
Further on February 21, 2013, 10,29,080 equity shares representing 0.51% and 43,87,162
equity shares representing 2.19% equity shares capital had been received by Appellant
resulted in increase in the shareholding of Appellant from 5.45% to 8.15%.
However Appellant had delayed in filing disclosures as required under Regulation 29(1) and
29(2) of SEBI (SAST) Regulations, 2011by 120 days and 128 days respectively and Further
5
no disclosures as required under Regulation 13(1) and Regulation 13(2) read with
Regulation 13(5) of SEBI (PIT) Regulations, 1992 had been made.
Accordingly SEBI imposed the penalty of 4,50,000 for the aforesaid violations on the
Appellant. Being aggrieved by the direction of SEBI, the appellant has filed the appeal before
Hon’ble Tribunal and contended the following:
Delay in filing disclosures was unintentional and there no was malafide intention on part of
the appellant and that appellant has not gained anything by not making timely disclosures.
Receipt of additional shares of Target Company by appellant was not an account of any
positive act on part of appellant but the same were received on account of
amalgamation/merger which was duly approved by the Delhi High Court.
Relying upon decisions of this Tribunal in case of Raghu Hari Dalmia & Ors Vs. SEBI and in
the case of Vitro Commodities Pvt. Ltd. Vs. SEBI it is contended that the penalty imposed
upon the appellant is grossly disproportionate to the alleged violation and since penalty is
imposed by ignoring the provisions contained under of SEBI Act, the impugned order is
liable to be quashed and set aside.
Issues: Whether the penalty imposed by the SEBI is justified?
Decision: After taking into considerations the facts and circumstances of the case, the
Hon’ble Tribunal held that Obligation to make disclosures as per SEBI (SAST) Regulations,
2011 and SEBI (PIT) Regulations, 1992 arises on perusal to the acquisition of shares
irrespective of the fact that the shares are acquired through open market purchase or on
pursuant to scheme of amalgamation, intimation of the shareholding shall be given within the
prescribed time as stated in SEBI (SAST) Regulations, 2011. Further Penalty for violating
regulation 29(1) and 29 (2) of SEBI (SAST) Regulations, 2011 at the rate of Rs. 1 lac per
day would be more than Rs. 1 crore each. As against the above, after considering all
mitigating factors, AO has imposed composite penalty of Rs. 4.5 lac which cannot be said to
be excessive or unreasonable. Accordingly the Hon’ble Tribunal found no reason to interfere
with the order passed by SEBI and appeal was dismissed.
6
The Hon’ble Tribunal held that
proper opportunity of being
heard must be given to every
appellant before passing any
order.
SAT order in the matter of Mr. Vilas Valunji, Mr. Partha Debnath,
Mr. Janardhan Shriniwas Purandare and Mr. V. A. Norhi
Facts:
The present appeal is filed by Mr. Vilas Valunji, Mr.
Partha Debnath, Mr. Janardhan Shriniwas Purandare
(hereinafter referred as “Appellants to appeal No. 68”)
and Mr. V. A. Norhi (hereinafter referred as “Appellant to
appeal No. 70”), collectively referred to as “Applicants”,
against the order passed by SEBI (“Respondent”)
imposing a penalty of Rs. 4,50,000 each on Appellants for violation of Regulation 14(1) of
SEBI (SAST) Regulations, 1997 and Rs. 10,00,000 on Appellant to appeal No.70 for
violation of Regulation 7(1)(A) read with 7(2) of SEBI (SAST) Regulations, 1997. Being
aggrieved by the order of SEBI, Appellants filed an application before Hon’ble Tribunal to set
back the order passed by adjudicating officer on the ground that service of Show Cause
Notice (“SCN”) was not effected and ex-parte impugned order was by passed by
Adjudicating officer.
Issues: Whether the penalty imposed by the SEBI is justified?
Decision: After taking into considerations the facts and circumstances of the case, the
Hon’ble Tribunal held that both the orders were liable to be quashed and set aside on the
ground that there was no effective service on the Appellants, and as such, a valuable right of
Appellants of being heard before the impugned orders were passed against the Appellants
had been violated. The matter was, therefore, remanded to SEBI to hold an enquiry after
issuing Show Cause Notices (SCNs) to the Appellants afresh at the address given by them
in accordance with the rules and pass orders on merit as per law after giving an opportunity
of hearing to the Appellants.
Consent order in the matter of M/s. Count N Denier (India) Limited
SEBI had initiated adjudication proceedings against M/s Count N Denier (India)
Limited(“Applicant”) for the alleged violation of the provisions of Regulation 6(2), 6(4) and
8(3) of SEBI (SAST), 1997. Pending to the Adjudication Proceeding, Applicant had filed the
consent application in respect of delay of compliance of the provisions of Regulation 6(2)
and 6(4) and delay of 4870, 4505, 4139, 3774, 3409, 2963, 2597, 2232, 1867, 1502, 1136,
771, 406 and 41 days in filling the requisite disclosures under Regulation 8(3) of SEBI
(SAST) Regulation, 1997 for the years 1998 to 2011. In the meeting of Applicant and SEBI
7
representatives It was noted that since considerable time has passed since SEBI (SAST)
Regulation, 1997 came into force, therefore the non-compliances of Regulation 6(2) and 6(4)
would not be considered for the purpose of calculation of settlement amount.
Accordingly, The applicant proposed to settle the above non-compliances of 8(3) of SEBI
(SAST) Regulations, 1997 on the payment of Rs. 7,09,750 towards settlement charges. The
terms as proposed by the applicant were placed before High Power Advisory Committee
(HPAC) and on the recommendation of HPAC, SEBI settle the above non compliances.
Consent order in the matter of M/s. Macor Packaging Limited
M/s Macor Packaging Limited (“Applicant”) has voluntarily filed the consent application in
respect of delay of compliance of Regulation 6(2) and 6(4) and also a delay of 5741 days,
5376 days, 5010 days, 4645 days, 4280 days, 3915 days, 3549 days, 3184 days, 2819
days, 2454 days, 2088 days, 1723 days, 1358 days, 993 days in filing the requisite
disclosures under Regulation 8(3) of SEBI (SAST) Regulation, 1997 for the years 1998 to
2011. In the meeting of Applicant and SEBI representatives, It was noted that since
considerable time has passed since SEBI (SAST) Regulation, 1997 came into force,
therefore the non-compliances of Regulation 6(2) and 6(4) would not be considered for the
purpose of calculation of settlement amount.
Therefore, the Applicant had voluntary filed the consent application for the settlement of
above violations and proposed to pay a sum of Rs 6,43,125 towards settlement charges.The
terms as proposed by the applicant were placed before High Power Advisory Committee
(HPAC) and on the recommendation of HPAC, SEBI settle the above non compliances.
Consent order in the matter of M/s.Potential Investment and Finance
Limited
M/s. Potential Investment and Finance Limited(“Applicant”) has voluntarily filed the consent
application in respect of delay of compliance of the provisions of Regulation 6(2) and 6(4)
and delay of 5726 days, 5361 days, 4995 days, 4630 days, 4265 days, 3900 days, 3534
days, 3169 days, 2804 days, 2439 days, 2073 days, 1708 days and 1343 days in filling the
requisite disclosures under Regulation 8(3) of SEBI (SAST) Regulation, 1997 for the years
1998 to 2010. In the meeting of Applicant and SEBI representatives It was noted that since
considerable time has passed since SEBI (SAST) Regulation, 1997 came into force,
8
therefore the non-compliances of Regulation 6(2) and 6(4) would not be considered for the
purpose of calculation of settlement amount.
Accordingly, The applicant proposed to settle the above non-compliances of 8(3) of SEBI
(SAST) Regulations, 1997 on the payment of Rs. 6,05,625 towards settlement charges. The
terms as proposed by the applicant were placed before High Power Advisory Committee
(HPAC) and on the recommendation of HPAC, SEBI settle the above non compliances.
Consent order in the matter of M/s. Shri Niwas Leasing and Finance
Limited
M/s. Shri Niwas Leasing and Finance Limited (“Applicant”) has voluntarily filed the consent
application in respect of delay of compliance of the provisions of Regulation 6(2) and 6(4)
and delay of 5563 days, 5198 days, 4832 days, 4467 days, 4102 days, 3737 days, 3371
days, 3006 days, 2641 days, 2276 days, 1910 days, 1545 days and 1180 days in filling the
requisite disclosures under Regulation 8(3) of SEBI (SAST) Regulation, 1997 for the years
1998 to 2011. In the meeting of Applicant and SEBI representatives It was noted that since
considerable time has passed since SEBI (SAST) Regulation, 1997 came into force,
therefore the non-compliances of Regulation 6(2) and 6(4) would not be considered for the
purpose of calculation of settlement amount.
Accordingly, The applicant proposed to settle the above non-compliances of 8(3) of SEBI
(SAST) Regulations, 1997 on the payment of Rs. 6,01,875 towards settlement charges. The
terms as proposed by the applicant were placed before High Power Advisory Committee
(HPAC) and on the recommendation of HPAC, SEBI settle the above non compliances.
9
Adjudicating/WTM orders
Target Company Noticee Regulations Penalty
Imposed/
Decision
Taken
M/s.MD Overseas
Limited
M/s. MD Overseas Limited Regulation 8(3) of the SEBI
(SAST) Regulations, 1997
Rs. 7,00,000
M/s. Gee Gee
Granites Limited
Mr. Rajamani Regulation 30(2) read with
Regulation 30(3) of the SEBI
(SAST) Regulations, 2011
Rs. 1,00,000
M/s. Count N Denier
(India) Limited
M/s. Count N Denier (India)
Limited
Regulation 6(2), 6(4) and 8(3)of
the SEBI (SAST) Regulations,
1997
Rs. 7,09,750
M/s. Niraj Cement
Structurals Limited
Mr. Vijay kumar Rajkumar
Chopra
Regulation 29(1) & 29(2) read
with Regulation 29(3) and
Regulation 31(2) read with
Regulation 31(3) of SEBI (SAST)
Regulations, 2011 and
Regulations 13(1), 13(3), 13(4),
13(4A) read with regulation 13(5)
of SEBI (PIT) Regulations, 1992.
Rs. 12,00,000
M/s. Adi Rasayan
Limited
Mr. Bhavesh J. Doshi, Mr.
Jayprakash J. Doshi, Mr.
Narendra C. Solanki, Ms.
Poonam N. Solanki, Ms.
Roopal H. Kawa, Mr.
Natwarlal Keshavjibhai Kawa
and Ms. Reena Kawa
Regulation 29(1) and 29(2) read
with 29(3) of SEBI (SAST)
Regulations,2011
Rs. 15,00,000
M/s. Abhishek
Corporation Limited
Ms. Anjali Annasaheb Mohite Regulation 8(A)(3) of SEBI
(SAST) Regulations, 1997
Rs. 5,00,000
M/s. Capman
Financials Limited
M/s. Upvan Securities Private
Limited
Regulation 7(1A) and 7(2) of
SEBI (SAST) Regulations,1997
Rs. 2,00,000
10
M/s. Sincere
Packers Limited
M/s. Sincere Packers Limited Regulation 8(3) of SEBI (SAST)
Regulations,1997
Rs. 7,00,000
Harvard Consultants
LLP (Formerly
known as "M/s
Harvard Finance
Company Limited")
M/s. Sabero Organics Gujarat
Limited
Regulation 7(1) read with
Regulation 7(2) of SEBI (SAST)
Regulation, 1997 read with
Regulation 35 of SEBI (SAST)
Regulation, 2011
Rs. 2,00,000
M/s. Residency
Projects and
Infratech Limited
Mr. Bhanwarlal H Ranka, Mr.
Pradeep B Ranka, Ms.
Kusum B Ranka, Ms.
Sangeetha P Ranka, Ms.
Anjana B Ranka, Mr. Arun B
Ranka, Ms. Rachana A
Ranka, Mr. Kantilal G Bafna
Regulation 11(2) read with
Regulation 14(1) of
the SEBI (SAST) Regulations,
1997
Rs. 50,00,000
M/s.Novel Trade
Links Limited
M/s.Novel Trade Links
Limited
Regulation 8(3) of SEBI (SAST)
Regulation, 1997
Rs. 7,00,000
M/s. Niraj Cement
Structurals Limited
Mr. Gulshan V Chopra Regulation 29(2) read with
regulation 29(3) and regulation
31(2) read with regulation 31(3)
of SEBI (SAST) Regulation, 2011
and Regulation 13(3), 13(4),
13(4A) read with regulation 13(5)
of SEBI (PIT) Regulations, 1992
Rs. 15,00,000
M/s. Niraj Cement
Structurals Limited
M/s. Custom Capsules
Private Limited
Regulation 29(1) & 29(2) read
with 29(3) of SEBI (SAST)
Regulation, 1997 and Regulation
13(1), & 13(3) read with
regulation 13(5) of SEBI (PIT)
Regulations, 1992
Rs. 25,00,000
M/s. Niraj Cement
Structurals Limited
Mrs. Asha Vijaykumar Chopra
Regulation 31(2) read with
regulation 31(3) of SEBI (SAST)
Regulations, 2011 and
Regulation 13(4A) read with
regulation 13(5) of SEBI (PIT)
Regulations, 1992
Rs. 2,00,000
11
HINT OF THE MONTH
M/s. Ahlcon
Parenterals (India)
Limited
Mr. Bikramjit Ahluwalia, Ms.
Sudarshan Walia and others
Regulations 11 (1) read with 14
(1) of SEBI (SAST) Regulations,
1997
Rs. 15,00,000
M/s. Ahlcon
Parenterals (India)
Limited
M/s. Capricon Industrials Ltd.,
Mr. BikramjitAhluwalia, Ms.
SudarshanWalia and others.
Regulations 11 (2) read with 14
(1) of SEBI (SAST) Regulation,
1997
Rs. 15,00,000
M/s. Midland
Polymers Limited
M/s Nikhar Investment and
Credit Pvt. Ltd., Mr. Mukund
Kumar Saboo, M/s.
SuryajyotiVanijya&Viniyog
Ltd., Mr. SurinderBhuraria,
M/s Midland Plastics Ltd., Mr.
SudhirLakhotia and Ms.
AlkaLakhotia
Regulation 7(1A) read with 7(2)
and Regulation 11(2) read with
Regulation 14(1) of SEBI (SAST)
Regulations, 1997
Matter
disposed off
Payment considerations by the acquirer under the open offer can be made by cash and / or by issue of equity
shares and / or secured debt instruments (investment grade) and / or convertible debt instruments (convertible
to equity shares) of acquirer (or PACs, if any) if such equity shares and secured debt instruments are listed.
The chosen mode of payment is required to be disclosed in the open offer document meant for shareholders of
the target company.
{As substantiated from FAQ of SEBI on SEBI Takeover Regulations, 2011}
12
Target Company
M/s. ZF Steering Gear
(India) Limited
Registered Office
Pune
Net worth of TC
NA
Listed At
BSE
Industry of TC
Auto Parts & Equipment
Acquirer
M/s. ZF Lenksysteme
GmbH (“Acquirer”) and
M/s. Robert Bosch GmbH
(“PAC”)
Target Company
M/s. Hindusthan Safety
Glass Industries
Limited
Registered Office
Kolkata
Net worth of TC
Rs. 2,87,75,424
(31.03.2014)
Listed At BSE and CSE
Industry of TC
Houseware
Acquirer-
Mr. Ripu Sudan Kundra
and Mrs.
ShilpaShethyKundra
Details of the offer: Offer to acquire 7,94,350 equity
shares at a price of Rs. 12/- per fully paid up equity
share payable in cash.
Triggering Event: Share Purchase Agreement
(SPA) for the acquisition of 1,23,660 (4.05%) Equity
Shares and Share Sale/Purchase Confirmation for
14,50,000 (47.46%) Equity Shares of the Target Company.
Triggering Event: Indirect Acquisition of 2,340,000 Equity
Shares representing 25.79% of the Target Company
Details of the offer: Offer to acquire 23,59,058 equity
shares at a price of Rs. 439/- per fully paid up equity share
payable in cash.
Latest Open
Offers
13
Target Company
M/s Sarda Papers Limited
Registered Office
Nashik
Net worth of TC
Rs. 1.06 Lacs
(31.03.2014)
Listed At
BSE, ASE, DSE and CSE
Industry of TC
Paper and Paper
Products
Acquirers
Mr. Manish Ladage, Mr.
N.R. Parameswaran, Ms.
Kamini Johari, Mr. Kartik
Johari
Target Company
M/s. Artech Power
Products Limited
Registered Office
Cochin
Net worth of TC
Rs. (7.31) lacs
(31.03.2014)
Listed At BSE, MSE, CSE and
DSE
Industry of TC
Electronic Components
Acquirer-
Mr.
BhadreshVasantraiMeh
ta and
Mr. ParthBhadresh
Mehta
Details of the offer: Offer to acquire 37,89,342Equity
Share at a price of Rs. 10.50/- per fully paid up equity
share payable in cash.
Triggering Event: Share Purchase Agreement
(SPA) for the acquisition of 49,373 (0.33%) Equity Shares and
Preferential Allotment of 1,10,00,000 (74.13%) Equity Shares
and control over Target Company.
Triggering Event: Share Purchase Agreement
(SPA) for the acquisition of 23,11,498 (74.11%) Equity Shares
and control over Target Company.
Details of the offer: Offer to acquire 8,07,402equity shares
at a price of Rs. 2.75/- per fully paid up equity share payable
in cash.
14
Target Company M/s Josts Engineering
Company Limited
Registered Office Mumbai
Net worth of TC
Rs. 1523.04Lacs
(31.03.2014)
ListedAt
BSE Limited
Industry of TC
Industrial Machinery
Acquirers and PACs
Mr. Jai Prakash Agarwal,
Mr. Vishal Jain, Mr.
Krishna Agarwal,
Mr.Abhishek Agarwal, J.
P Agarwal & Sons (HUF),
Mr. Rajendra Kumar
Agarwal, Ms. Anita
Agarwal and Ms. Shikha
Jain
Triggering Event: Share Purchase Agreement
(SPA) for the acquisition of 3,69,910 (48.38%) Equity Shares
and control over Target Company.
Details of the offer: Offer to acquire 1,98,810 Equity Shares
at a price of Rs 410/- per fully paid up equity share payable in
cash.
15
Regular Section
Automatic Exemption from Open Offer
SEBI (SAST) Regulations, 2011 provides that whenever an acquirer acquires shares/voting
rights in excess of the threshold or control over the Target Company as prescribed under
regulation 3 and 4 of SEBI (SAST) Regulations, 2011, then the acquirer is required to make
a public announcement of offer to the shareholders of the Target Company.
Brief introduction of Regulation 3 and 4
Regulations 3
Regulation 3 of SEBI (SAST) Regulation, 2011 contains provisions regarding substantial
acquisition of shares or voting rights of the Target Company. It deals with the specific limits
triggering which the acquirer(s) are required to come out with an open offer in accordance
with these Regulations.
Regulation 4
Regulation 4 provides that No acquirer shall acquire, directly or indirectly, control over such
target company, irrespective of acquisition or holding of shares or voting rights in a target
company unless the acquirer makes a public announcement of an open offer.
16
Regulation 10 of SEBI (SAST) Regulations, 2011 provides automatic exemption to the
following acquisitions from the requirement of making Open offer under regulation 3
and 4 subject to the compliance of the conditions as prescribed therein.
Acquisition Exempt from Regulation 3 & 4
Acquisition pursuant to inter se transfer of shares amongst qualifyingpersons such
asImmediate relatives, Promoters and other as provided under Regulation 10 (1) (a).
Acquisition in the ordinary course of business by an underwriter, stock broker, Merchant
Banker, Scheduled Commercial Bank etc as provided under Regulation 10 (1) (b).
Acquisition pursuant to an agreement of disinvestment subject to the fulfillment of the
conditions as provided under Regulation 10 (1) (c).
Acquisition pursuant to schemes made under section 18 of the Sick Industrial
Companies (SpecialProvisions) Act, 1985, Merger, demerger etc. as provided under
Regulation 10 (1) (d).
Acquisition pursuant to the provisions of SARFAESI Act 2002, SEBI (Delisting of Equity
Shares) Regulations, 2009, by way of transmission, succession or inheritance.
Acquisition of voting rights or preference shares carrying voting rights arising out of the
operation of sub-section (2) of section 87 of the Companies Act, 1956.
17
Acquisition Exempt from Regulation 3
The acquisition of shares of a target company, not involving a change of control oversuch
target company, pursuant to a scheme of corporate debt restructuring in terms ofthe
Corporate Debt Restructuring Scheme notified by the Reserve Bank of India videcircular no.
B.P.BC 15/21.04, 114/2001 dated August 23, 2001subject to the conditions as provided
under Regulation 10 (2).
Acquisition Exempt from Regulation 3 (1)
Acquisition pursuant to Buy-back as provided under Regulation 10 (3).
Acquisition Exempt from Regulation 3 (2)
Acquisition pursuant to Rights Issue subject to the conditions as provided under
Regulation 10 (4) (a) and 10 (4) (a).
Acquisition pursuant to Buy Back subject to the conditions as provided under Regulation
10 (4) (c).
Acquisition in exchange of shares as mentioned under Regulation 10 (4) (d).
Acquisition from state-level financial institutions or their subsidiaries or companies
promoted by them as mentioned under Regulation 10 (4) (e).
Acquisition from a venture capital fund or a foreign venture capital investor registered
with the Board as mentioned under Regulation 10 (4) (f).
The above mentioned acquisitions shall be exempt from the obligation to make an
open offer under regulation 3 and regulation 4 subject to fulfillment of the following
compliances:
Regulation 10(5)– Acquirer shall give advance intimation to the stock exchangeatleast 4
working days prior to the proposed acquisition.
Following transactions are required to comply with Regulation 10(5)
• Inter se transfer of shares
• Acquisition from State Level Financial Institution
18
• Acquisition from VCF or a foreign venture capital investor
Regulation 10(6)– Any acquirer seeking exemption shall file a report with the stock
exchanges not later than four working days from the acquisition.
All category of automatic exemptions as specified under Regulation 10 are required to
comply with Regulation 10 (6)
Regulation 10(7) - The Acquirer shall file a report to SEBI within 21 working daysof the
date of acquisition along with supporting documents to the Board giving all details in respect
of acquisitions and fee of Rs1,50,000.
Following transactions are required to comply with Regulation 10(7)
• Inter se transfer of shares
• Scheme of Arrangement not directly involving Target Company
• Acquisition of voting rights or preference shares carrying voting rights
• Acquisition through CDR scheme
• Buy Back of shares
• Acquisition through Right Issue
• Acquisition from VCF or a foreign venture capital investor
19
Altruist Technologies Acquires Big Data Firm iConnectiva
Altruist has acquired big data analytics firm Connectiva Analytics and Insights for a cash
deal of 370-420 Million. With the acquisition Altruist seeks to integrate iConnectiva’s offering
with its product to service its existing 70 clients including British Telecom, Reliance and
Vodafone. Post the deal, iConnectiva’s 100 employees would join Altruist taking the total
headcount to 550.
Acquisition of Tech Startups Bookpad by Yahoo
Yahoo acquired Bangalore based tech startup, Bookpad for a consideration of INR 500
Million, it is the first buy in the Indian Market by Yahoo. Over a period, Bookpad pivoted to
B2B from B2C and added many a names to its clientele list which included e-learning and
cloud storage startups.
Acquisition of 26% Stake in Anjuman Brand by Biba
Ethnic wear brand BIBA Apparels has acquired 26.66% stake in Anjuman Brand Designs Pvt Ltd,
which sells garments under the brand name AnjuModi, for an undisclosed amount.It aims to
expand its distribution network and strengthen its presence in the higher-end fashion category
through new product launches and JVs with acclaimed designers and also plans to launch a
value brand to enhance its presence at lower price points.
.
Market Updates
20
Disclaimer:
This paper is a copyright of Corporate Professionals (India) Pvt. Ltd. The entire contents of this
paper have been developed on the basis of SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997 and latest prevailing SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011 in India. The author and the company expressly disclaim all and any
liability to any person who has read this paper, or otherwise, in respect of anything, and of
consequences of anything done, or omitted to be done by any such person in reliance upon the
contents of this paper.
Visit us at
D- 28, South Extn. Part I New Delhi – 110049
T: 40622200 F: 91.40622201
A venture of
Our TEAM
OUR GAMUT OF SERVICES:-
Investment Banking;
Valuation & Business Modelling;
Merger & Acquisition;
Tax & Transaction Advisory;
ESOP/ESPS;
Domestic & Cross Border Investment
Structuring;
Group Reorganisation;
Corporate Funding;
Issue Management.
Manoj Kumar
D: +91.11.40622228
Divya Vijay
D: +91.11.40622248