SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 1997

Regulations 10 and 11

Increase in shareholding of promoters - Absence of public announcements - SEBI issued notice for violation of regulations 10 and 11 - Appellate Tribunal ordered for violation of regulation 11--Admissibility thereof

The shareholdings of the promoters and person acting in concerts were increased via fresh issue of shares. They failed to make public announcement conclusively to which SEBI had issued notice with respect to violation of regulations 10 and 11(1) calling upon them to show cause as to why suitable directions under sections 11 and 11B of the SEBI Act and regulations 44 and 45 read with corresponding provisions of regulations 33 and 35 of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 should not be issued against them. The Appellate Tribunal had held that regulation 10 was not violated, but regulation 11(1) was violated, albeit the direction with regard to issue of public announcement and open offer was not sustainable at a belated stage. There was a delay of about 5 years in issuing show-cause notice relating to acquisition/incidents. However, monetary penalty was imposed. Held: It was viewed that there would not be any violation of regulation 10 if the 'acquirer', which would include the 'person acting in concert', acquires new shares or voting rights when he individually or along with the 'person in concert', already holds more than 15 per cent shares in the target company. Thus, the contention of violation of regulation 10 was not admissible.

REFERRED :

FAVOUR : Appeal dismissed

A.Y. :

SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 1997

Regulations 10 and 11

SUBSCRIBE FOR FULL CONTENT