TMI Blog2015 (11) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... tutory rights - Time limit of 4 days prescribed in Regulation 14(1) is crucial and important - Monetary penalty of ₹ 8 lakh imposed under section 15H(ii) is not disproportionate as compared to maximum penalty of ₹ 25 crore imposable for such a violation - Any offer made by an acquirer after statutory time limit of 4 days prescribed in Regulations 14(1) would not amount to sufficient compliance of Takeover Regulations – Decided in favour of Revenue. - Appeal No. 319 of 2014 - - - Dated:- 20-7-2015 - J.P. Devadhar and Jog Singh, JJ. For The Appellant : Mr. Khamir Kamdar, Advocate i/b P.H. Bathiya Associates For The Respondnet ; Mr. Kumar Desai, Advocate with Mr. Rushin Kapadia, Advocate i/b K Ashar Co. Per : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is required to make public announcement of such shares in accordance with the Regulations within four days, but the same could not be made on time due to reasons beyond its control. 4. Learned counsel for the appellant, Mr. Khamir Kamdar, vehemently argued that although Regulation 14(1) prescribes four days limitations for making public announcement yet Regulation 24(1) requires the merchant banker to ensure that the arrangements for funds and money before the public announcement could be made. Such finances could only be organized by the acquirer within 85 days of the two SPA s, thus, the open offer was rightly made on 89th day and the delay is, therefore, liable to be condoned. Moreover, an interest was also paid for such a delay, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght of shareholders to exit and/or to continue with the company cannot be compensated by paying meager interest by the acquirer. The time limit of 4 days prescribed in Regulation 14(1) is crucial and important as time is of the essence in such acquisitions and consequent open offer. The value of time limit prescribed in Regulation 14(1) cannot be undermined by reading into it Regulation 24 in the normal course unless exceptional circumstances are proved to exist. 7. We would like to reproduce relevant provisions of the Takeover Regulations, 1997 and SEBI Act, 1992 for the sake of convenience:- Takeover Regulations 1997: Acquisition of [fifteen] per cent or more of the shares or voting rights of any company. 10. No ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified therein: Provided that in case of disinvestment of a Public Sector Undertaking, the public announcement shall be made by the merchant banker not later than 4 working days of the acquirer executing the Share Purchase Agreement or Shareholders Agreement with the Central Government or the State Government as the case may be, for the acquisition of shares or voting rights exceeding the percentage of shareholding referred to in regulation 10 or regulation 11 or the transfer of control over a target Public Sector Undertaking. General obligations of the merchant banker. 24. (1) Before the public announcement of offer is made, the merchant banker shall ensure that- (a) the acquirer is able to implement the of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ker. Such an interpretation would frustrate the main objective of underlining the making of prompt public announcement by an acquirer. We, therefore, do not find any legal infirmity in the impugned order and same deserves to be upheld. Monetary penalty of ₹ 8 lakh imposed by the learned adjudicating officer under section 15H(ii) of the SEBI Act, 1992 on the appellant is not disproportionate as compared to the maximum penalty of ₹ 25 crore imposable for such a violation of the Takeover Regulations, 1997. 9. Lastly, section 15 H undoubtedly talks about making of open offer by the acquirer in accordance with law and does not talk of delayed open offer. However, such open offer by an acquirer has to be made under the Takeover Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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