Appeal No.134 of 2011. Case: 1. Mr. Raghu Hari Dalmia, 2. Mrs. Padma Dalmia, 3. Mr. Mridu Hari Dalmia, 4. Mrs. Abha Dalmia, 5. Sharmila Dalmia Parivar Trust, 6. Mr. Gaurav Dalmia, 7. Kanupriya Trust, 8. Devanshi Trust, 9. Aryamanhari Trust, 10. Aanyapriya Trust, 11. Raghu Hari Dalmia Parivar Trust, 12. Ms. Vrinda Dalmia, 13. Gautam Dalmia HUF, 14. Vasumana Trust, 15. Mrs. Kanupriya Somany, 16. Raghu Hari Dalmia HUF, 17. Mridu Hari Dalmia HUF, 18. Mridu Hari Dalmia Parivar Trust, 19. Mrs. Usha Devi Jhunjhunwala, 20. Ms. Rasalika Dalmia, 21. Ms. Saudamini Dalmia Vs Securities and Exchange Board of India. Securities and Exchange Board of India
| Case Number | Appeal No.134 of 2011 |
| Counsel | For Appellants: Mr. Janak Dwarkadas, Senior Advocate with Mr. Ankit Lohia, Mr. Sharad Vaid, Mr. Chakrapani Misra, Ms. Suruchi Rungla and Ms. Meghna Rajadhyaksha, Advocates and For Respondent: Mr. Vikram Nankani, Advocate with Mr. Abhishek Punglia and Ms. Aparna Kalluri, Advocates |
| Judges | N. K. Sodhi, Presiding Officer and P.K. Malhotra, S.S.N. Moorthy, Members |
| Issue | Companies Act, 1956; Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 - Regulations 11(1), 11(2) |
| Judgement Date | November 21, 2011 |
| Court | Securities and Exchange Board of India |
Order:
N. K. Sodhi, Presiding Officer, (At Mumbai)
1. The appellants herein are the promoters/members of promoter group of OCL India Ltd., a company incorporated under the Companies Act, 1956 having its registered office in the State of Orissa. It shall be referred to hereinafter as the company. Its equity shares are listed on the National Stock Exchange of India Limited and on the Bombay Stock Exchange Limited, Mumbai. On February 24, 2003 the company announced a scheme to buy back its equity shares up to a maximum of 11,83,708 fully paid up shares of the face value of Rs. 10 each representing 16.59 per cent of its issued and paid up capital at a price of Rs. 80 per share. As per the buy back scheme, the shareholders were given an option of tendering their shares to the company. The letter of offer issued in this regard specifically states that the promoters would not participate in the buy back. The buy back offer opened on March 14, 2003 and closed on April 7, 2003. When the buy back scheme was announced, the appellants (promoters of the company) held 44,64,770 equity shares representing 62.56 per cent of the paid up equity capital of the company and they were in control of the company. The buy back was successful and the company bought back 11,83,708 equity shares as a result whereof the percentage shareholding of the appellants in the company increased from 62.56 per cent to 75 per cent of the total paid up capital. This increase in the voting rights was not a consequence of any acquisition of shares or voting rights by the appellants but was only a passive increase incidental to the buy back of shares by the company. As a result of this increase, there was no change in the control of the company which was already with the appellants. The Securities and Exchange Board of India (for short the Board) did not receive any complaint against the buy back or against the consequent increase in the percentage of shareholding of the appellants nor did it raise on its own any objections while processing the buy back offer document of the company. One Jindal Securities Private Limited filed on October 9, 2006 a writ petition in the Delhi High Court against the company stating that due to the increase in the percentage shareholding of the promoters/appellants from 62.56 per cent to 75 per cent pursuant to the buy back offer, the promoters/appellants had triggered regulations 11(1) and 11(2) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as the takeover code) and that they were required to make a public announcement to acquire shares in accordance with the takeover code. The writ petition was disposed of by the High Court on February 7, 2007 with a direction to the Board to treat the same as a representation on behalf of the petitioner therein and deal with it in accordance with law. It was thereafter that the Board issued to the appellants a show cause notice dated July 17, 2007 alleging that they had to make a public announcement to acquire shares from the shareholders of the company and not having made a public offer, they violated...
To continue reading
Request your trial