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Khaitan Electricals stock hit the upper circuit of 5 per cent at Rs 74.35 on the BSE in early trade on Wednesday after SEBI has directed its four promoter entities to pay “consideration amount” with interest to its shareholders and to make an open offer within 45 days.
The order, dated December 31, was against — Sunil Krishna Khaitan, Krishna Khaitan, Khaitan Lefin Ltd and Oriental Mercantile Co Ltd.
The market regulator said: “The noticees, Sunil Krishna Khaitan, Krishna Khaitan, Khaitan Lefin and Oriental Mercantile Co shall make a combined public announcement to acquire the shares of the target company, Khaitan Electricals Ltd... within a period of 45 days from the date of this order.”
It was found that the entities had not made public announcement regarding purchase of shares in the company even as their shareholding increased beyond the threshold limit of 15 per cent in 2007.
SEBI further said that the entities “shall, along with consideration amount, pay interest at the rate of 10 per cent per annum, from June 16, 2007 to the date of payment of consideration...”
Shareholders who were holding shares in the target company on the date of violation and whose shares have been accepted in the open offer, after adjustment of dividend, if any, paid, would be eligible for the consideration amount.
Currently promoters hold 54.58 per cent stake in the company while about 20,000 retail investors control 25.89 per cent stake in the company. Bodies Corporate hold other 16.86 per cent in the company.
SEBI observed that the entities had acquired 1.3 million shares (upon conversion of warrants) in the company in two tranches.
Out of these Sunil Khaitan and Krishna Khaitan acquired 50,000 shares each, KLL had bought 9 lakh shares, while OMCL acquired three lakh shares, on March 12, 2007.
The regulator said that the stake of the promoter group, collectively increased from 25.83 per cent to 34.21 per cent and the acquirers collectively failed to make a public announcement within four working days from the date of purchase.
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