Directs public announcement for share acquisition, rejects Regional Director approval defence
SEBI directs promoters of target co., Vision Cinemas Ltd., to make public announcement of share acquisition (by way of preferential allotment), as it resulted in increase in individual & collective shareholding beyond the threshold limit, and pay 10% interest alongwith consideration for delayed announcement; Rejects noticees’ contention that since alleged share allotment was approved by Regional Director, MCA, it was exempt under Takeover Regulations from open offer requirement; Observes that Regional Director’s approval was not sought pursuant to a scheme of arrangement, as required under Regulations, but was an approval of a contract which could be entered into only with prior approval of Regional Director as required under Companies Act, 1956; Further rejects noticees’ contention that preferential allotment was made without receiving in-principle approval from BSE and shares allotted to them were not yet credited to their demat accounts, thus, since shares were technically not allotted to them, no public announcement open offer could be made, holds that, “if a person agrees to acquire shares / voting rights or control over the target company, he becomes an acquirer to make public announcement”; On noticees’ submission that they had not yet exercised their voting rights, observes “It is the entitlement to exercise voting rights which triggers the obligation under those regulations and not the actual exercise of voting rights or availing of other rights such as dividend, etc”; Relies on Bombay HC ruling in B. P. Amoco Plc. Vs. SEBI & SAT ruling in Shri Sharad Doshi vs. The Adjudicating officer and others:SEBI
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