Decided on March 31,2003



C.Achuthan, - (1.) THE present appeal is directed against the Respondent's order dated 2.7.2001. By the said order S/Shri Ravi Prakash Khemka, Raj Kumar Khemka, Ratan Kumar Khemka, Tirupathi Kumar Khemka and Madhu Sudan Khemka (the acquirers)along with their group companies were debarred from accessing the capital market for a period of 5 years. THE order is issued under section 11B read with section 4(3) and section 27 of the Securities and Exchange Board of India Act, 1992 (the Act).
(2.) The acquirers in the wake of substantial acquisition of shares/control of Damania Airways Ltd.(name changed to Skyline NEPC Ltd.) (Appellant No.3), as required under the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovoers) Regulations, 1994 (Takeover Regulations).made a public announcement to acquire 64,66,800 fully paid up equity shares of Rs.10/- each representing 20% of the voting capaital of Skyline NEPC Ltd. The offer was to remain open from 1.2.1996 to 29.2.1996. The offer price was Rs.35.25 per share. The total consideration payable for 64,66,800 shares was Rs.22.80 crores. The offer closed on 29.2.1996. Pursuant to the offer, several shareholders of the said compazny offered the shares held by them. In terms of regulation 22, person (s) acquiring shares is required within a period of four weeks from the date of closure of the offer complete all procedures relating to the offer including payment of consideration to the shareholders who have accepted the offer. However, a number of shareholders did not receive the consideration for the shares tendered by them in response to the public offer made by the acquirers. Even though the acquirers had promised to pay the purchase consideeration to the shareholders by 28.3.1996, they failed to do so. They sought time by 45 days to make balance payments by writing to the Respondent on 22.5.1996. The Respondent informed them that there is no provision in the TakeoverRegulations, for extending time for making payments and directed to complete the payment due to the shareholders and also to pay interest @ 15% for the period of delay. But the acquirers failed to comply with the said directions. It is in the said context, the Respondent passed the impugned order. Since the Respondent has treated the Appellants also as defaualters they have filed the present appeal claiming to be aggrieved by the Respondent's order. Three out of the five acquirers, namely S/Shri Ravi Prakash Khemka, Raj Kumar Khemka, and. Tirupathi Kumar Khemka had also filed a separate appeal (Appeal No.39/2001) challenging the order. Subsequently they withdrew the appeal. Two other companies viz. NEPC Textiles Ltd., and NEPC Paper Board Ltd. had also filed an appeal (Appeal No.41/2001). In the light of a clarification given by the Respondent that the said two companies are not covered by its order, the said appeal was also withdrawn.
(3.) THE Appellants and the Appellants in appeal nos. 39/2001 and 41/2001 had prayed for an interim order staying the operation of the impugned order during the pendency of the appeal. Concerned parties were heard and after considering all the relevant factors the Tribunal felt that it was not a fit case warranting an interim order. Accordingly the prayer for interim order was rejected vide the Tribunal's order dated 12.9.2001. Appeal Nos. 39/2001 and 41/2001 referred above were withdrawn only thereafter.;

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