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Securities and Exchange Board of India (SEBI): G. Mahalingam, whole time Member, in this order granted exemption from application of Section 3(2) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

An application was filed under Section 11(1) and Section 11(2)(h) of the SEBI Act read with Regulation 11(5) of the SAST Regulations, 2011 seeking exemption from application of Section 3(2) of the SAST Act on acquiring of shares and voting rights in the target company. The matter before the Board was that the promoters were willing to transfer by way of gift all the equity shares of the Target Company to the acquirer trusts. The transferor submitted the grounds on which they seek an exemption. Major grounds being the objective with which the transfer is proposed that is seamless intergenerational transfer of the trust fund in view of the fact that the beneficiaries are family members being non-commercial transaction. The other ground being that the ownership or control of the target company had not been affected. Also, pre and post-acquisition shareholding of promoter group would remain same. The acquirer/transferee confirmed that they have adhered to the Guidelines outlined in the Schedule to the SEBI Circular. Board noted all the grounds and ordered that the Target Company shall continue to be in compliance with the minimum public shareholding requirements under the Securities Contracts Regulation Rules, 1957 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Board was of the view that the exemption prayed by the applicants should be granted with certain conditions which the transferor and transferee needs to fulfill. Therefore, exemption from application of Section 3(2) was granted. [Proposed Acquisition of Shares and Voting Rights in Target Company FDC Ltd., In re,2018 SCC OnLine SEBI 156, order dated 21-08-2018]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Appellate Tribunal: In a recent order passed by S.J. Mukhopadhaya, Chairperson and Bansi Lal Bhagat J., Member  regarding the appeal of the petitioner, who claims to be a promoter, regarding excessive voting rights given to L&T Finance (Financial Creditor).

The brief facts being that the National Company Law Tribunal (NCLT) had directed the Resolution Professional to grant proportionate rights to L&T, which had been challenged here in this case by the appellant regarding the rights granted not to be just and proper.

It was held by this Tribunal, that the appellant, who was found to be a promoter/director of the corporate debtor, had no locus standi to challenge the voting rights of any financial creditor. It was also held that with respect to Section 29-A of the Insolvency and Bankruptcy Code, 2016, that the appellant was not a ‘connected person’ to file the case. Hence, no relief was granted and the appeal was dismissed, since the Tribunal found no merit in the present appeal. [Gurdeep Singh Sahani v. Berger Paints India Limited, 2017 SCC OnLine NCLAT 437, decided on 30-11-2017]

Hot Off The PressNews

Supreme Court: The bench of J.S. Khehar, CJ and Dr. D. Y. Chandrachud asked the Central Government to apprise it within a week as to whether it is going to amend the election law or rules for enabling non-resident Indians (NRIs) to vote in elections in India by way of E-voting

The Centre and the Election Commission submitted before the Court that they have agreed to the proposal in principle and the only issue is the ways to effect it and that NRIs can be allowed to vote through postal ballot by either changing the Representation of the People Act, 1951 or by amending the rules made under the Act.

The Court was hearing the petitions filed by NRIs Nagender Chindam and Shamseer VP.

Source: PTI