In an order dated 30 June the Securities and Exchange Board of India (SEBI) granted the promoters of Secur Industries an exemption from the mandatory open offer requirement under section 11(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
HP Agarwal and the acquirers acting in concert with him together hold 17.49% of Secur’s paid-up capital. They propose to acquire one million convertible warrants and 1.2 million equity shares from Secur through a preferential allotment, as a consequence of which their shareholding in Secur would increase from 17.49% to 46.4%.
The acquirers filed an application on 5 February 2008 to SEBI’s takeover panel under regulation 3(1), read with regulation 4(2), seeking exemption from the applicability of regulation 11(1) of the takeover regulations, on the grounds that they had infused Rs12 million (US$247,000) in Secur in order to aid the company during its financial crisis in 2003.
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The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
