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TMI Blog2020 (1) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... exure 1 (Colly). The said notice was received by the Respondent on 20.07.2019 as per track report annexed at Page 18 of the application. But the Respondent/J.P. Financial Services Pvt. Ltd., failed to give reply by furnishing information in Form No. BEN-1 to applicant within a period of 30 days. Hence the applicant compelled to file the instant application within a statutory period as provided in the Act under section 90(7). It is also a matter of record that during the course of arguments, the Respondent/J.P. Financial Services Pvt. Ltd., also filed an affidavit dated 24th October, 2019, through its authorized signatory Mr. Majoj Chandok, whereby the Respondent/J.P. Financial Services Pvt. Ltd., affirmed and assert on oath relying on the shareholding pattern of the Company as reflected at Page 93 of the Reply, and further affirmed that there is no individual having more than 10 per cent of the answering respondent. The applicant may take appropriate/necessary steps to file Form No. BEN-1, based on the disclosure made by Respondent/J.P. Financial Services Pvt. Ltd. - However, the Respondent Company is directed to take sufficient care regarding the recognition of the individua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an indirect right/entitlement. Therefore, if an individual exercise direct holding in the Reporting Company, he/she shall not be termed as Significant Beneficial Owner (SBO). Accordingly, the deciding factor - comes out to be exercising indirect right or entitlement. Therefore, if an individual exercise direct holding in the Reporting Company, the Significant Beneficial Owner Rules do not get triggered. 5. It is further submitted that as per Rule 2(1)(h) of the Rules, Significant Beneficial Owner(SBO) in relation to a Reporting Company means an individual referred to in sub section (1) of Section 90, who is acting alone or together, or through one or more persons or trust, possesses one or more of the following rights or entitlements in such Reporting Company viz. Holds indirectly, or together with any direct holdings, not less than 10% of the shares. Holds indirectly, or together with any direct holdings, not less than 10% of the voting rights in the shares. Has right to receive or participate in not less than 10% of the total distributable dividend. or any other distribution, in a financial year through indirect holdings alone or together with any direct holdings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-Section 7, the Tribunal may after giving an opportunity of being heard to the parties concerned, make such order restricting their rights attached with the shares within a period of 60 days of receipt of application or such other period as may be prescribed. 11. The amended rules mandate companies such as the Applicant to take necessary steps to find out if there is any individual who is a Significant Beneficial Owner (SBO) as defined in clause (h) of rule 2 of the Rules in relation to that Company. If such an individual exists, the Company is required to identify him and cause such member to make a declaration in Form No. Ben-1. Accordingly, the Applicant was required to give notice in Form No. Ben-4 to a member other than an individual who holds not less than 10 per cent of its shares seeking information in accordance with sub-Section (5) of Section 90. 12. Hence, in the light of the above provisions of the Companies Act, 2013 and the amendment made therein in the Rules (SBO) and the Rules, it is stated that J.P. Financial Services Pvt. Ltd. is a body corporate of the Applicant Company and as such, it is mandated to provide details of the Significant Beneficial Owner (SB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot shift. The Respondent Company acquired 44,02,201 shares in the open offer announcement after complying with SEBI (Substantial Acquisition of Shares and Take Offer) Regulations, in the year 2018. The prime objective of the open offer was to acquire substantial acquisition of shares/voting rights accompanied with the change in control and management of the Target Company. Post-acquisition of shares in the open offer, shareholding of the Respondent Company increased to 25.05 per cent and it is second largest shareholder in the Applicant Company after promoters. The Respondent Company has stated that Applicant Company is playing foul tricks and trying to block the voting rights of the Respondent Company since management of the Applicant Company is expecting a serious threat from the Respondent Company. IA 616 of 2019 18. During the pendency of CP 82 of 2019, the Respondent/J.P. Financial Services Pvt. Ltd., filed through its director for vacation of interim relief and/or rejection of the Petition No. CP 82 of 2019. By way of this IA, the Applicant seeks: (a) Vacation of interim relief passed by this Tribunal on 18.09.2019 and/or (b) Rejection/return of the Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain the existence of such an individual and cause member to make a declaration in Form No. BEN-1 a notice is issued in Form No. BEN-4 to a member (other than an individual) who holds not less than 10 per cent of its shares seeking information in accordance with sub section (5) of Section 90 to save from penal action by the Competent Authority upon the applicant. 24. Since the Respondent Company i.e. J.P. Financial Services Pvt. Ltd., is a body corporate member of the applicant, as such it is mandated to provide details of Significant Beneficial Owner as per Rules i.e. in terms of Explanation III of clause (h) of sub Rule 1 of Rule of SBO Rules, an individual shall be considered to hold a right or entitlement indirectly in the Reporting Company, if he satisfies any of the following criteria, in respect of a member of the Reporting Company viz. (a) Where the member of the Reporting Company is a body corporate (whether incorporated or registered in India or abroad other than limited liability partnership). (b) an individual who: holds majority stake in that member or holds majority stake in the ultimate holding company. 25. Thus, the Respondent being Corporate me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also a matter of record that during the course of arguments, the Respondent/J.P. Financial Services Pvt. Ltd., also filed an affidavit dated 24th October, 2019, through its authorized signatory Mr. Majoj Chandok, whereby the Respondent/J.P. Financial Services Pvt. Ltd., affirmed and assert on oath relying on the shareholding pattern of the Company as reflected at Page 93 of the Reply, and further affirmed that there is no individual having more than 10 per cent of the answering respondent. 28. Further affirm that, there is no ultimate holding company of the answering respondent and as such there is no individual who holds majority stake in such ultimate holding company. 29. In view of such disclosure by the Respondent/J.P. Financial Services Pvt. Ltd., on oath, the applicant may take appropriate/necessary steps to file Form No. BEN-1, based on the disclosure made by Respondent/J.P. Financial Services Pvt. Ltd., in his reply which is also reproduced herein above in paragraph 26. 30. However, the Respondent Company is directed to take sufficient care regarding the recognition of the individual(s) being the Significant Beneficial Owner(s) of the Respondent Company or its m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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