Case Briefs

Competition Commission of South Africa in a statement prohibited the transaction proposed by ECP Africa intended to acquire Burger King (South Africa) and Grand Foods Meat Plant (Pty) Ltd (grand Foods) from Grand Parade Investments.

What would be the impact of the merger?

Commission found that the merger would lead to a significant reduction in the shareholding of historically disadvantaged persons in the target firm, from more than 68% to 0% as a result of the merger.

The said merger would not have resulted in a substantial prevention or lessening of competition.

Commission stated that the acquiring firms do not have ownership by historically disadvantaged persons (HDPs). As a direct result of the proposed merger, the merged entity will have no ownership by the HDPs and workers.

No Public Interest

Therefore, Commission was concerned that the proposed merger would have a substantial negative effect on the promotion of greater spread of ownership, in particular to increase the levels of ownership by historically disadvantaged persons in firms in the market as contemplated in Section 12A(3)(e) of the Competition Act.

Concluding the statement, Commission stated that the proposed transaction raised significant public interest concerns and has a substantial negative effect on the promotion of a greater spread of ownership.

Competition Commission of South Africa

Case BriefsTribunals/Commissions/Regulatory Bodies

Security and Exchange Board of India (SEBI): S. K. Mohanty, (Whole Time Member) granted exemptions to the United Provinces Sugar Company Ltd. from the requirements of complying with Minimum Public Shareholding (“MPS”) norms as mandated under rule 19 (2) (b) of provisions of Securities Contracts (Regulations) Rules, 1957 (“SCRR”) and further from the provisions of regulation 27(3)(d) of SEBI(Delisting of Equity Shares) Regulations, 2009 (“Delisting Regulations, 2009”).

The company filed an application before SEBI under Regulation 25A of Delisting Regulations, 2009 seeking certain relaxations for voluntary delisting of the company. The equity shares of the Company were listed on CSE for more than 40 years, of which 94.88% were held by the promoters and the balance shares representing 5.12% were held by 274 public shareholders. There had been no change in the shareholding of the promoters and promoter group of the Company since 1997. The Company asserted that since CSE is non-operational and it is not listed on any nationwide stock exchange, there is no investor interest in the shares of the Company and hence, various methods prescribed by SEBI to achieve MPS compliance were not feasible. It was submitted that since most of the public shareholders were inactive, it was highly unlikely to receive the required 90% consent from such public shareholders for delisting.

The issues before the Board were:

  • Whether a company can be exempted from minimum public shareholding requirement and also
  • Whether the requirement for receiving the consent of the shareholders holding at least 90% of public shareholding of a company, as mandated under Regulation 27(3) (d) of the Delisting Regulations, 2009 can be relaxed?

The Board noted that SEBI Circular CIR/MRD/DSA/18/2014 dated 22-05-2014, inter-alia, exempted companies which were listed exclusively on de-recognized or non-operational stock exchanges from the requirements of MPS prescribed in rules 19(2)(b) and 19A of SCRR and Clause 40A of the Listing Agreement, for the purpose of enabling such companies to opt for voluntary delisting.

For the aforesaid reasons, SEBI, in the interest of investors granted relaxation from the applicability of regulation 27(3) (d) of Delisting Regulations, 2009 to the Company, with further directions that, the Company should ensure compliance with provisions of all other applicable laws including regulation 27(3)(c) of Delisting Regulations, 2009. Additionally, the Applicant should cause to publish the newspaper advertisement in at least one national newspaper in English and in local vernacular newspapers in each State where its public shareholders are residing, as per the addresses available in its records, announcing its delisting proposal within 30 days of this Order, and at least 10 days before the letter is sent to the public shareholders seeking their consent for the delisting proposal. [Delisting of The United Provinces Sugar Company Ltd., In Re., 2020 SCC OnLine SEBI 214, decided on 21-12-2020]

Business NewsNews

The Competition Commission of India (CCI) approves the acquisition of 4.94% shareholding in Suzuki Motor Corporation (SMC) by Toyota Motor Corporation (TMC) and the acquisition of 0.24% shareholding in TMC by SMC.

The proposed combination relates to the acquisition of a minority shareholding of 4.94% in SMC by TMC, and the acquisition of a minority shareholding of approximately 0.24% by SMC in TMC.

TMC is a Japanese multinational automotive manufacturer. TMC also provides services in other fields such as housing, financial services, communications, marine and biotechnology, and afforestation. In India, TMC is engaged in the manufacturing and sale of automobiles through its subsidiary, Toyota Kirloskar Motor Private Limited, and in providing financial services through its subsidiary, Toyota Financial Services India. TMC is also engaged in the sale of commercial vehicles through its indirectly held joint venture, Hino Motors Sales India Private Limited.

SMC is a Japanese multinational corporation inter-alia engaged in the business of automobiles, motorcycles and outboard motors. In India, SMC is engaged in the manufacturing and sale of automobiles and two-wheelers through its subsidiaries viz. Maruti Suzuki India Limited, Suzuki Motor Gujarat Private Limited and Suzuki Motorcycle India Private Limited.

Ministry of Corporate Affairs

[Source: PIB]

[Press Release dt. 26-11-2019]