9911796707
TMI Blog2002 (8) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner lodged the above 3000 equity shares of ₹ 10 each of the respondent-company for effecting the registration of transfer in their name. However, the respondent-company failed and refused to record the registration of transfers of the said shares in favour of the petitioner. The respondent conveyed the company s decision to refuse to register the transfers of the said shares alleging that the petitioner has violated the provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 by acquiring more than the stipulated percentage of shares in concert with others. It is further submitted that the respondent-company has not submitted any concrete evidence as to how the above named petitioner has violated the SEBI Takeover Code. 2. The respondent-company in its reply submitted that the petitioner was required to comply with the provisions of the SEBI Takeover Regulations, 1997 as also various provisions of the SEBI Act. The respondent-company further submitted that they had already registered the transfer of 8.82 per cent of shares in favour of the petitioner and other companies associated with them. According to the respondent-company any f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies Act as amended through the Depositories Act, 1996, the listed company has no right to reject transfer as the shares are freely transferable. 4. It was further submitted that SEBI Takeover Code is for the protection of the shareholder and not for the Company. Basic emphasis was given keeping in view the basic concept of free transferability of shares and the Company s Management cannot be allowed to misuse this Regulation for the ulterior motive to prevent such investors whom they consider inconvenient by giving whatsoever false excuses. It was further submitted that the regulation 44 of the said Takeover Code reads as under : The Board may, in the interests of the securities market, without prejudice to its rights to initiate action including criminal prosecution under section 24 of the Act give such directions as it deems fit including : ( a )directing the person concerned not to further deal in securities; ( b )prohibiting the person concerned from disposing of any of securities acquired in violation of these Regulations; ( c )directing the person concerned to sell the shares acquired in violation of the provisions of these Regulations; ( d )taking a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limits prescribed by law, the respondent-company has refused the registration on wrong assumptions and extraneous considerations and it is therefore submitted that necessary directions be given for effecting the registration of transfer of shares in favour of the petitioner company. It is further submitted that SEBI has not initiated any action and apparently the SEBI is satisfied that there is no violation of the SEBI Takeover Code. 8. It was further submitted that Aaspas has given fund to Anwesha and Redwood. The other two companies have not at all received any fund from the company. Anwesha and Redwood jointly held 4.4 per cent of the share capital of the respondent-company. Without admitting anything and without prejudice to that contention, it is submitted that even if they are acting in concert the shareholding of both these companies shareholding of 4.4 per cent is to be taken into consideration against the statutory requirement of 5 per cent. In the same way funding done by Zora Traders Ltd. to Sound and Kamal the total shareholding held by Sound and Kamal together is 4.37 per cent of the paid up capital of the respondent-company, which is below the prescribed limit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... names of the directors etc. with the Registrar of Companies and the same are available for inspection by the public. The respondent-company has not taken pains to collect any necessary information and they have merely on the plea that these shares have been purchased through the same brokers, the company having very less capital, the fund is given by another company etc., assumed that these parties are also acting in concert. Therefore, merely on this ground it would not be proper to assume that all those who have acquired the shares through the same broker are acting in concert. In our opinion, from the material placed on record, it is not possible to agree with the respondent-company s contention that these four private limited companies have also acquired these shares are acting in concert. If the shares acquired by these parties are excluded then the shares acquired by the petitioner company in the share capital of the respondent-company would come to 2.02 per cent i.e. below 5 per cent ceiling prescribed under the Code. We do find some force in the argument that the respondent- company cannot be permitted to misuse the provisions of the SEBI Takeover Code for the ulterior mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out any basis or prima facie reason and when it was required to give the details for unjustifiable action they have come out with various reasons. It is therefore submitted that the refusal to transfer was made earlier without any basis or prima facie reason and hence it was not justified at all. Under the circumstances they should be asked to transfer shares in the name of the petitioner-company. 15. It was further argued by the petitioner that the complaint was lodged with SEBI somewhere in 1999. It was submitted that SEBI has not initiated any further action and apparently SEBI was satisfied that there is no violation of Takeover Code. 16. It is further argued that shares were acquired by other companies as they were acting in concert. However, when there is an acting in concert there has to be some motive behind such acquisition of shares. As the respondent is holding more than 50 per cent of the paid up capital of the company any number of acquisition by the petitioner cannot effect the position of the Respondent and hence the question of acquiring the shares and acting in concert for that purpose would not serve. Even otherwise independently the respondent-company i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clined to keep these appeals in abeyance, particularly, having regard to the fact that the materials placed before us is found to be inadequate to form an opinion of alleged violation of the said Takeover Code. Further if this appeal is allowed, the shareholding would go only up to 2.02 per cent, which would be below the 5 per cent ceiling prescribed under the Code. 19. It has been argued by the Respondent that the Respondent had made a complaint in May, 1999 with SEBI where the purpose of acquisition of share was given as Company wants to operate in the market whereby they want to create a volatility, false market and price manipulation and to play down the image of the company as well as in the eyes of the shareholders and to fluctuate the share prices. However, in the affidavit the Respondent has stated that the petitioner-company has continued to hold the physical shares even today. Hence there are contrary arguments with different authorities. SEBI has not taken any action against the complaint letter which shows that there is no material to substantiate the allegation of the Respondent and hence the refusal of transfer of shares made by the company is not justified. 20. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
