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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 ..... der of the Whole Time Member (referred to hereinafter as 'WTM') in WTM/GM/EFD/442/ 2018-19 passed under Section 11 and 11B of the Securities and Exchange Board of India Act, 1992 (referred to hereinafter as 'SEBI Act') and Regulation 32 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation, 2011 (referred to hereinafter as the 'Takeover Regulations') dated July 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 appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of 15,000 shares by inter se transfer on 26th November, 2014 was for Rs. 180.15 per share. The volumeweighted average market price ("VWAMP") for the sixty trading days preceding the date of issuance of notice for the proposed inter se transfer i.e. preceding November 26, 2014 was Rs. 141.40/- per share. As the acquisition price was more than 125 percent 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 Rs. 3.40 per share. By implication the total consideration paid is higher by only Rs. 51,000/- and, therefore, the appellant showed, his willingness to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of 10 percent from the date when it incurred liability to make the public announcement till the payment to the shareholders who were holding the shares in the target company on the date of violation after adjustment of dividend paid, if any. Hence the appeal. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. In our considered opinion the direction of the WTM needs to be varied for the following reasons. Reasons 13. Rule 32 of the Securities and Exchange Board of India (Substantial 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 Secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the permitted limit, that too between the promoters. In the case of 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 Takeov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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