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TMI Blog2019 (5) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... n market, the direction of the WTM to make public announcement to acquire shares would be disproportionate. The directions as provided by Rule 32(1)(b) of the Takeover Regulations as cited supra would meet the ends of justice. The appellant can be directed to transfer 0.04 percent shares i.e. 2000 shares through open market and to direct to deposit an amount of ₹ 3,60,300/- (2000 shares x ₹ 180.15 : purchase price) in the Investor Protection and Education Fund would meet the ends of justice. Order 1. The appeal is hereby partly allowed. The order of the WTM directing the appellant to make public announcement to acquire shares of the target company and to pay interest at the rate of 10 percent as detailed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25, 2018 whereunder the present appellant was directed to make public announcement to acquire shares of M/s. Patel Airtemp (India) Limited (hereinafter referred to as Target Company ) within a period of 45 days from the date of the order and to pay interest at the rate of ten percent per annum as detailed in the order. The appellant is promoter of the Target Company consisting of a consortium of individual promoters. The Target Company in the disclosure made on 4th December, 2014 under Regulation 29(2) of the Takeover Regulations disclosed to SEBI that the appellant s holding in the Target Company increased from 24.74 percent to 25.04 percent as on December 3, 2014. This has occasioned due to acquisition of 15,000 shares (0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcent of the VWAMP it was not exempt under Regulation 10(1)(a)(ii) of the Takeover Regulations from the open offer obligation. The appellant submitted that the actual price is higher beyond permissible limit of 125 percent of VWAMP by just ₹ 3.40 per share. By implication the total consideration paid is higher by only ₹ 51,000/- and, therefore, the appellant showed, his willingness to pay the said amount to the Investor Protection and Education Fund if so directed by SEBI. 5. The WTM took into consideration the provisions of the Takeover Regulations as detailed in the order. He came to the conclusion that in view of the provisions of the Takeover Regulations as the acquisition in question was inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Heard learned counsel Mr. Somasekhar Sundaresan assisted by Mr. Abishek Venkataraman, Mr. Joby Mathew, and Mr. Nikhil Shah for the Appellant and Mr. Gaurav Joshi, Senior Advocate assisted by Mr. Mihir Mody and Mr. Sushant Yadav, for the Respondent. Mr. Somasekhar Sundaresan, learned counsel for the appellant submitted before us that the appellant now does not dispute that the acquisition of 0.30 percent of the shares had triggered Regulation 3(1) read with Regulation 3(3) of the Takeover Regulations though the sale and purchase of shares was between the promoters through open market. He however submitted that the considering the nature and extent of the transaction that the same was between the promoters and only to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial Acquisition of Shares and Takeovers) Regulations, 2011 provides as under: Power to issue directions. 32.(1) Without prejudice to its powers under Chapter VIA and section 24 of the Act, the Board may, in the interest of investors in securities and the securities market, issue such directions as it deems fit under section 11 or section 11B or section 11D of the Act, including, ( a) directing divestment of shares acquired in violation of these regulations, whether through public auction or in the open market, or through an offer for sale under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, and directing the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Nirma (supra) the Hon ble Supreme Court in para 17 observed that in the given set of circumstances of that case the withdrawal of the open offer to acquire 20 percent of shared of the Company was neither in the interest of the investor nor in the development of the securities market. Thus, the case of Nirma was decided in its own circumstances. 17. In the case of Kishore Ajmera (supra), the Hon ble Supreme Court found that the manipulative and fraudulent market practices are required to be curbed by brining a comparative legislative to bring about some clarity and certainty which cannot be disputed. Considering all the aspects of the case that violation of the Takeover Regulation is only to the extent of 0. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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