Comments
SEBI has asked Vakrangee Holdings (VHPL) to make an open offer to acquire the shares of its listed subsidiary Vakrangee within 45 days. VHPL is owned by Dinesh Nandawana, who has also promoted the listed company Vakrangee. SEBI observed that in 2013, VHPL increased its stake in Vakrangee and triggered the Takeover Code but failed to make an open offer. SEBI has also asked Vakrangee to pay money to shareholders with interest for the loss caused to them.
SEBI, in its order on Thursday, said that its investigations observed that during the quarter ending June 2013, the shareholding of one of the promoter entities (VHPL) of the target company (Vakrangee) increased to over 12.53 crore shares from over 11.54 crore shares. Investigations revealed that pursuant to the above transaction dated May 27, 2013, wherein post-transaction holding of VHPL has been shown as 25.5 per cent exceeding the threshold limit of 25 per cent of the total paid-up capital of the company, but no open offer was made in acordance with SEBI’s Takeover Code.
Show cause notice
SEBI had issued a show cause notice dated March 9, 2017, to Vakrangee’s promoters asking them as to why suitable directions should not be issued against the company under Sections 11 and 11B of SEBI Act and takeover regulations.
Vakrangee promoters in its defence said they along with persons acting in concert were already holding 34.27 per cent stake in the listed company and were in control of the same and had not acquired any fresh control by acquiring excess 0.50 per cent stake, if any, above the trigger limit of 25 per cent. Hence, there was no change in management and control of the target company due to the excess acquisition and nothing new had happened. They also argued that their acquisition was within the limit of 5 per cent creeping acquisition that is allowed every year.
SEBI said once the threshold limit is breached, Regulation 3 of the Takeover Regulations is violated and for the purpose of this regulation, it is immaterial who holds the actual control.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.