Decided on April 30,2003



G.N.Bajpai, - (1.) BACKGROUND 1.1 Mr. C V Kamani, Mr. R C Kamani, Mr. D C Kamani, Unicorn Holdings Pvt. Ltd- a holding and investment company for the Kamani family and Troupe International Ltd-Overseas Corporate Body owned by Kamani Family (hereinafter collectively referred to as Acquirer) collectively hold 65.57% shares in Rajath Finance Limited (hereinafter referred to as Target company). The Target company has been promoted by Kamani family. The shares of the Target company are listed at the Saurashtra Kutch Stock Exchange, Ahmedabad Stock Exchange and The Stock Exchange, Mumbai. 1.2 The Acquirer proposes to acquire 20.11% shares of the Target company from public shareholders and 14.31% shares from other directors/promoters/ relatives holding shares in the Target company. Pursuant to the aforesaid proposed acquisition of 34.42% shares of the Target company, the Acquirer will hold 100% shares in the Target company.
(2.) APPLICATION FOR EXEMPTION 2.1 The Acquirer made an application dated 30.11.2002 to the Securities and Exchange Board of India (hereinafter referred to as SEBI) under sub-regulation (2) of regulation 4 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as "the Regulations") seeking exemption from the provisions of Regulation 11(1) for making public announcement by making an advertisement and to appoint Merchant Banker / Registrar in terms of the Regulations. Submissions IN THE EXEMPTION APPLICATION 3.1 In the aforesaid application dated 30.11.2002 and subsequent correspondence dated 12/12/2002 the Acquirer inter-alia, submitted as under: 3.2 The Target Company is a medium scale finance company operating since last 17 years. The Company is listed since 1986. Since last few years the business prospects of finance Companies are not encouraging. The business and the profitability of the Target company was also affected and the company is not in a position to declare dividend. 3.3 The shares of the Target company which are listed at Stock Exchanges are also not quoted since last more than six years due to lack of liquidity and not encouraging future prospects of Finance Companies. 3.4 The funds of individual investors who are shareholders in the Target company are blocked due to lack of liquidity, and they have no exit opportunity available to them. Further the Target company considering the size and profitability is finding difficult to comply with the various provisions of listing agreement. 3.5 In the best interest of the investors at large the promoters propose to acquire all the shares of the Target company held by public and other promoters/ directors and their relatives etc. to make the Target company as closely held company. 3.6 As the number of shareholders are small and concentrated mostly at Rajkot and Mumbai and to make minimum expenditure in the best interests of the investors and to complete the acquisition in the shortest period possible exemption is sought from the long procedure for making public offer and ready to comply with the condition, if any, imposed by SEBI.
(3.) RECOMMENDATION OF THE PANEL The said application was forwarded to the Takeover Panel in terms of sub-regulation (4) of regulation 4 of the Regulations. The Takeover Panel vide its report dated 20.12.2002 has recommended, inter alia, as under: "Since the acquirer propose to acquire all the shares held by public and other promoters / directors and their relatives, in the facts stated, grant of exemption as sought is recommended subject to the acquirer - (i) making individual offers to each of the remaining shareholders by directly addressing offer letters offering to buy the shares; (ii) sending such letters to each of such shareholders at the recorded addresses by Registered Acknowledgement Due Post; (iii) Submitting of Certificate of auditor / independent Chartered Accountant to the effect that the offer letters were so posted; and (iv) Offering price determined as per Regulation 20(2) of the Takeover Code but not less than Rs.10/- per share; (v) Opening separate account with Nationalized / Scheduled Commercial Bank and depositing therein full amount payable for acquisition of at least 20.11% equity shares of the target company held by public at large (excluding 14.31% shares held by other Directors / Promoters relatives)and retaining such amount therein until paid to such shareholders; (vi) Submitting certificate from auditors / independent Chartered Accountant Certifying that such separate Bank Account has been opened and the full amount payable as aforesaid has been deposited therein before dispatch of offer letters; (vii) Submitting certificate from the auditors / independent Chartered Accountant certifying that such separate Bank account was operated and money therein was utilized only for purpose of making payments to the said public shareholders.";

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