SEBI Vs. KIRANBHAI D SHETH
SECURITIES APPELLATE TRIBUNAL
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1.1 Shri Kiranbhai D. Sheth and others (hereinafter referred to as "the Acquirer") are the promoters of Ahmedabad Victoria Iron Works Company Ltd. (hereinafter referred to as "the Target company").
1.2 The shares of the Target company are listed at The Stock Exchange Ahmedabad (ASE).
1.3 ASE vide its letter dated 18.09.2002 informed SEBI that the Target company has applied for delisting of the shares of the Target company pursuant to regulation 21(3) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as "the Regulations") stating that the non-promoter shareholding of the Target company has reduced below 10% of the total capital of the Target company. Further, it was also stated that the Acquirers' shareholding as on 31.03.2001 was 87.89% and it exceeded to 90.29% on 31.08.2002 and that the aforesaid acquisition was made by the Acquirer following the creeping acquisition route.
1.4 As per the information available with SEBI it was observed that the Acquirer was holding 87.89% of the total paid up capital of the Target company and on 31.03.2002 and 31.08.2002, the Acquirer acquired 161 shares and 57 shares respectively of the Target company, thereby increasing its shareholding to 89.66% on 31.03.2002 and to 90.29 % on 31.08.2002.
(2.) SHOW CAUSE NOTICE
A show cause notice dated 7.11.2002 was issued to the Acquirer inter alia stating that :
2.1 The Acquirer has acquired 161 shares representing 1.77% of the voting capital of the Target Company on 31.03.2002 .
2.2 Pursuant to the acquisition of 1.77% voting rights on 31.3.2002, the Acquirers' holding increased from 87.89% to 89.66% and as a result of the aforesaid acquisition the provisions of regulation 11(2) have been triggered.
2.3 A public announcement was to be made by the Acquirer in terms of 14(1) of the Regulations within 4 working days from the date of 31.3.2002 in accordance with the Regulations and as the Acquirer acquired the said shares/voting rights and control of the company in the manner as stated above without making a public announcement , the Acquirer had, prima-facie, violated the provisions of Regulations 11(2) read with 14(1) of the regulations and therefore is liable for penal action under the Regulations and SEBI Act, 1992.
The Acquirer submitted its reply to the abovesaid show cause notice vide its letter dated 21.11.2002.
(3.) THEREAFTER a personal hearing was granted to the Acquirer on 28.12.2002 wherein it reiterated the submissions made by it in reply to the show cause notice.;
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