Thursday, December 27, 2012

Evasion or Exemption of Open Offers after violation of SEBI (SAST)

Evasion or Exemption of Open Offers after violation of Sec 10(1)(a) of SEBI (SAST)
Further to my post on Nippo Batteries, where i held the view that there has to be an open offer from promoters as there were violations of of Sec 10(1)(a) of SEBI (SAST) in case of Inter -se - transfer among promoters.

Today, One more deal took place on Exchange of Piramal Life at Rs 36/- between promoters. As per declaration by Sri Krishna Trust, (See here)Wherein they propose to acquire 33.08% of equity from Piramal Holdings P Ltd. As per their declaration they undertake to trade at the highest price of Rs 30.15. The trade has taken place on stock exchange at Rs 36/- and since the terms of Sec 10(1)(a) of SEBI (SAST) is not adhered, the promoters will have to make an open offer.

I hope again that SEBI takes initiatives in these blatant violation of their guidelines and compel the promoters of Piramal Life and Nippo Batteries, in the interest of minority shareholders. 

I hold on to view that there has to be an open offer, but that may not be the view shared by the company or the promoters as they have mentioned in the filings with the stock Exchange that it does not come in the ambit of open offer.

I am sure that SEBI should take side of Minority Shareholders and compel the company to make an open offer as the companies has not complied with the guidelines on SEBI takeover code required for exemption from making an open offer.

This is not a recommendation to anybody whatsoever to buy OR sell this share, but it is my thought process and views on this topic.

I welcome your critical comments and suggestions.

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