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TMI Blog2017 (1) TMI 1656X X X X Extracts X X X X X X X X Extracts X X X X ..... y this Court by an order of April 17, 2013. SEBI asserts that the relevant clause and the parking of a substantial percentage of the shares in the amalgamated company in a purported trust was in clear violation of the Securities Contracts (Regulation) Rules and Rules and Orders made under the Securities and Exchange Board of India Act, 1992. In short, the grievance is that as a result of substantial shares in the amalgamated company being parked with the purported trust, the public shareholding in the amalgamated company, which is a listed public company, has stood reduced to 4.32% of its paid-up capital. According to SEBI, the public holding of shares in any listed company may not go below 25% of its paid-up capital. The amalgamated comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of the order rejecting Descon's petition, the then IPCL agreed to purchase Descon's shares in DPSCL at the same price of Rs. 710 per share at which it acquired the 57.18% shares held by the then promoters of DPSCL. The then IPCL thus paid a further sum of Rs. 97.12 crore and its total shareholding in DPSCL swelled to about 93% of the paid-up capital of such company. Under the scheme of arrangement and amalgamation propounded in this Court, some of the investments of the then IPCL and shares equivalent to 40% of the paid-up capital in DPSCL were placed before a trust, with the trustees apparently having no connection with the promoters of the then IPCL or the would-be new promoters of DPSCL upon the scheme of arrangement and amalgamation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was made despite the amalgamated company filing affidavits to demonstrate that SEBI had made exceptions in several cases, including in the celebrated case of Wipro Limited. SEBI has, however, maintained that the circumstances leading to the exception being made in the case of Wipro were different. SEBI submits that apart from anything else, Wipro had not attempted to negate the mandatory requirement of the minimum public shareholding by resorting to a scheme and informing SEBI ex post facto. SEBI has also indicated its unwillingness to be directly involved in the sale. The parties have also referred to a freezing order of June 4, 2013 passed by SEBI in respect of such part of the promoters' shareholding in the amalgamated company that e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, is not required to be gone into for the present purpose. The trust will cite this order and make a public offer for sale of the said 32,63,16,563 shares. Advertisements in such regard will be published in such newspapers as may be suggested by SEBI within a week of the form of the advertisement being forwarded to the office of SEBI in Kolkata. Such form of the advertisement should be forwarded to the relevant office within three weeks from date. The directions herein are in modification of the interim order of February 20, 2015 that restrains the amalgamated company from dealing with its shares. However, the interim order will continue for all other purposes till such time that the trust transfers the balance shares, other than those t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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