Takeover Panorama- A monthly Newsletter by TakeoverCode.com team -Legal Update -Hint of the Month: -Latest Open Offers -Case Study: SEBI’s view on the Scheme of Arrangement of M/s Aashee Infotech Limited -Market Update

1. Takeover
Panorama
A Monthly Newsletter by Corporate Professionals
Year VIII-Vol III

2. 2
Legal Update
− Exemption Order in the matter of NRB Industrial Bearings Limited
− Adjudicating / WTM orders
3
Hint of the Month
7
Latest Open Offers
8
Case Study
− SEBI’s view on the Scheme of Arrangement of M/s Aashee Infotech
Limited
12
Market Update
17
Insight

3. 3
Exemption granted as the
proposed transfer of shares
is between the trusts whose
trustees as well as Settlor
are common and belongs to
the promoter and promoter
group of the Target
Company.
Exemption Order in the matter of NRB Industrial Bearings
Limited
Facts:
1. NRB Industrial Bearings Limited (“Target Company”) is company incorporated under the
Companies Act, 1956 having its registered office at
Dhannur, 15, Sir P.M. Road, Fort, Mumbai - 400001.
The equity shares of the Target Company are listed on
the BSE Limited (“BSE”) and the National Stock
Exchange of India Limited (“NSE”).
2. Mr. Trilochan Singh Sahney, is the Settlor of Trilochan
Singh Sahney Trust 2 (“Acquirer”/”Trust 2”) and
Trilochan Singh Sahney Trust 1 (“Transferor”/”Trust 1”).
Mr. Trilochan Singh Sahney and Ms. Hanwantbir Kaur
Sahney are the trustees of both the Acquirer and the Transferor. The beneficiaries of the Trust
2 are Mr. Trilochan Singh Sahney, his wife Ms. Hanwantbir Kaur Sahney, his son Mr. Devesh
Singh Sahney, daughter Ms. Harshbeena Sahney Zaveri and his lineal bloodline descendants
(collectively referred as “Sahney Family”).
3. The Target Company is a wholly owned subsidiary of NRB Bearings Limited. The Sahney
families are the promoters of both the Target Company and NRB Bearings Limited. The
shareholding of the Sahney family in NRB Bearings Limited is inter alia held through Trust 1
which holds 3,77,55,640 equity shares (constituting 38.95%) of NRB Bearings Limited. Trust 1
is also designated as one of the promoters of NRB Bearings Limited.
4. Mr. Trilochan Singh Sahney and Ms. Hanwantbir Kaur Sahney in the capacity of trustees of
Trust 1, have proposed to transfer 38.95% shareholding in the Target Company to the Acquirer
by way of share transfer as a part of the private family arrangement which would increase the
holding of the Acquirer from 0% to 38.95% in the Target Company, thus triggering Regulation
3(1) of SEBI (SAST) Regulations, 2011.
LEGAL
UPDATES

4. 4
Grounds of Exemption:
Accordingly, the Acquirer has filed the present application seeking exemption from open offer
requirement under regulation 3 (1) of SEBI (SAST) Regulations, 2011 on the following grounds:
• The proposed transfer is only to give effect to the promoter family arrangement and will not
result in any change of control or change in management of the Target Company
• For the proposed transfer, no price is to be paid by the Acquirer and the total issued and
paid up capital of the Target Company will remain the same before and after the proposed
acquisition.
• There will be no change in the shareholding pattern of the promoter/ promoter group of the
Target Company.
• The transfer would in no way affect the interest of the shareholders including the minority
shareholders of the Target Company.
Decision:
SEBI observed that the Acquirer is a private family trust settled by Mr. Trilochan Singh Sahney,
the Trustee of the Transferor as well as the Acquirer. The Transferor is one of the promoter of
the Target Company and falls within the definition of 'promoter group' under SEBI (ICDR)
Regulations, 2009 and the Acquirer would become part of the promoter group pursuant to the
proposed acquisition as the Trustees and the beneficiaries of the Acquirer are family members
of Mr. Trilochan Singh Sahney, a promoter of the Target Company. Therefore, the Acquirer
would be regarded as a person deemed to be acting in concert with the promoters of the Target
company in terms of Regulation 2(1)(q) of the Takeover Regulations. Further, the reason for the
proposed transfer to the Acquirer is the internal reorganisation within the Trilochan Singh
Sahney Family.
After considering all facts and circumstances of the case, exemption granted to the proposed
Acquirer, the Trilochan Singh Sahney Trust 2 from complying with the requirements of
Regulation 3(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,

5. 5
2011 with respect to its proposed acquisition of 94,38,910 (38.95%) shares of the Target
Company, namely NRB Industrial Bearings Limited by way of share transfer from Trust 1.
Adjudicating/WTM orders
Target
Company
Noticee Regulations Penalty
Imposed/
Decision
Taken
M/s Vas
Infrastructure Limited
M/s Vas Educomp Pvt. Ltd.
M/s Yashraj Containeurs Ltd.
M/s Vasparr Shelter Ltd. M/s
Pushpanjali Drums Pvt. Ltd. &
M/s Precision Containeurs Ltd.
Regulation 29(2) read with
29(3) and 31(2) read with
31(3) of SEBI (SAST)
Regulations, 2011 and
Regulation 13(4A) read with
Regulation 13(5) of SEBI
(PIT) Regulations, 1992
Rs. 10,00,000
M/s Raj Packaging
Industries Limited
Shri Madanchand
Prasanchand
Regulation 29(2) read with
Regulation 29(3) of SEBI
(SAST) Regulations, 2011
and Regulation 13(3) read
with Regulation 13(5) of
SEBI (PIT) Regulations,
1992
Rs. 10,00,000
M/s ICSA India
Limited
Shri Gopu Bala Reddy Regulation 31(2) read with
31(3) of SEBI (SAST)
Regulations, 2011 and
Regulation 13(4), 13 (4A)
read with Regulation 13(5)
of SEBI (PIT) Regulations,
1992
Rs. 3,00,000
M/s White
Diamonds
Shri. Ajay K Kakkad Regulation 8(1) read with
8(2) of SEBI (SAST)
Rs. 4,00,000

6. 6
Industries Limited Regulations, 1997
M/s GHCL Limited M/s Dalmia Finance Limited Regulation 7(1A) of SEBI
(SAST) Regulations, 1997
Rs. 3,00,000
M/s GHCL Limited M/s Hotex Company Limited Regulation 7(1A) of SEBI
(SAST) Regulations, 1997
Rs. 3,00,000
M/s GHCL Limited M/s Oval Investment Private
Limited
Regulation 7(1A) of SEBI
(SAST) Regulations, 1997
Rs. 3,00,000
M/s Rasoi Limited Smt. Sumitra Devi Mody,
Smt. Shashi Mody, Shri.
Varunn Mody, M/s. Axcon
Trading & Manufacturing Co
Ltd. and others
Regulation 8(2) of SEBI
(SAST) Regulations, 1997
Disposed off.
M/s Zodiac
Ventures Ltd.
Mr. Ramesh V Shah, Mr. Jimit
R Shah, Ms. Pushpa R Shah,
Ms. Yesha R Shah
Regulation 7(1) read with
7(2) of SEBI (SAST)
Regulations, 1997
Rs. 2,00,000
M/s Zodiac
Ventures Ltd.
Mr. Hozef Darukhanawla Regulation 7(1A) read with
7(2) of SEBI (SAST)
Regulations, 1997
Rs. 4,00,000
M/s Zodiac
Ventures Ltd.
M/s Zodiac Ventures Ltd. Regulation 8(3) of SEBI
(SAST) Regulations, 1997
Rs. 2,00,000
M/s. Arunjyoti
Enterprises Limited
Mr. Polsani Ravinder Rao,
Ms. Lakshmi Rajan,
Mr. Ramana Boina Shankar,
Mr. PV Ravi Kumar,
Mr. P Suresh Gandhi,
Mr. A R S Rajan,
Ms. Ramana Bharati,
Mr. Sreeram V Mangalapalli,
Ms. P Leela Madhuri Devi,
Mr. Venkat Naresh Majeti
Regulation 7(1) read with
7(2) of SEBI (SAST)
Regulations, 1997,
Regulation 29(2) read with
29(3) of SEBI (SAST)
Regulations, 2011 and
Regulation 13(1), 13(3),
13(4), 13 (4A) read with
Regulation 13(5) of SEBI
(PIT) Regulations, 1992
Rs. 26,00,000

7. 7
HINT OF THE MONTH
The acquirer cannot launch a voluntary delisting offer in terms of Delisting Regulations of
SEBI, unless a period of twelve months has elapsed from the date of the completion of the
offer period.
{As substantiated from FAQ of SEBI on SEBI (SAST) Regulations, 2011}

8. 8
Target Company
M/s ICVL Chemicals
Limited
Registered Office
Mumbai
Net worth of TC
Rs.318.91 Lacs
(31.03.2013)
Listed At
BSE
Industry of TC
Chemicals
Acquirer
M/s Ram Alloy Castings
Private Limited
Target Company
M/s. Meenakshi
Enterprises Limited
Registered Office
Chennai
Net worth of TC
241.90 Lacs
(31.03.2013)
Listed At
MSE
Industry of TC
NA
Acquirer
M/s Anurodh
Merchandise Private
Limited (Acquirer) and
Mr. S.G.F
Melkhasingh (PAC)
Details of the offer: Offer to acquire 32,24,000
(26%) Equity Shares at a price of Rs. 12.00/- per
fully paid up equity share payable in cash.
Triggering Event: Induction of the Acquirer and PAC
as Promoter and Person in Control of the Target
Company.
Triggering Event: Share Purchase Agreement (SPA)
for the acquisition of 8,73,000 (2.69%) equity shares and
control over the Target Company.
Details of the offer: Offer to acquire 84,52,580 per fully
paid up equity share payable in cash.
Latest Open
Offers

9. 9
Triggering Event: Share Purchase Agreement (SPA)
for the acquisition of 13,750 (0.17%) equity shares and
control over the Target Company.
Details of the offer: Offer to acquire 21,35,250 (26%)
Equity Shares at a price of Rs. 10/- per fully paid up
equity share payable in cash.
Target Company
M/s Panafic Industrial
Limited
Registered Office
New Delhi
Net worth of TC
Rs. 118.85 Lacs
(31.12.2013)
Listed At
DSE
Industry of TC
Finance
Acquirers
Mr. Rajeev kumar Gupta
& Ms. Sarita Gupta
Target Company
M/s. Shreenath
Industrial Investment
Company Limited
Registered Office
Guajrat
Net worth of TC
Rs. 49.55 lacs
(28.02.2014)
Listed At
ASE
Industry of TC
NA
Acquirer
M/s Winsome Retails
& Marketing Private
Limited
Details of the offer: Offer to acquire 8,84,000
(26%) Equity Shares at a price of Rs. 13/- per paid
up equity share payable in cash.
Triggering Event: Share Purchase Agreement (SPA) for
the acquisition of 1,10,000 (3.24%) equity shares and
Preferential allotment of 7,45,000 (21.91) equity shares.

10. 10
Triggering Event: Share Purchase Agreement (SPA)
for the acquisition of 415,083 (9.29%) equity shares and
control over the Target Company.
Details of the offer: Offer to acquire 11,61,342 (26%)
Equity Shares at a price of Rs. 10/- per fully paid up
equity share payable in cash.
Target Company
M/s Surya Industrial
Corporation Limited
Registered Office
Uttar Pradesh
Net worth of TC
Rs. 44.72 Lacs
(31.12.2013)
Listed At
BSE, DSE, UPSE, ASE
& JSE
Industry of TC
Other Elect.Equip./ Prod.
Acquirers
Mr Pratik Sharadkumar
Mehta, Mrs Aruna Naresh
Satunda, Mr Kaushal D
Vadecha & Mr Nikhil
Champaklal Shah
Target Company
M/s Saptharishi
Finance Limited
Registered Office
Chennai
Net worth of TC
Rs. lacs
(31.03.2013)
Listed At
MSE
Industry of TC
Finance
Acquirer
M/s Devki Nandan
Textile Private Limited
Details of the offer: Offer to acquire upto 51,400
(25.74%) Equity Shares at a price of Rs. 2/- per
fully paid up equity share payable in cash.
Triggering Event: Share Purchase Agreement
(SPA) for the acquisition of 1,48,600 (74.30%) Equity
Shares and control over Target Company.

11. 11
Triggering Event: Share Purchase Agreement (SPA)
for the acquisition of 11,331,030 (61.62%) equity shares
and control over the Target Company.
Details of the offer: Offer to acquire 47,81,296 (26%)
Equity Shares at a price of Rs. 61.75/- per fully paid up
equity share payable in cash.
Target Company
M/s Anjani Portland
Cement Limited
Registered Office
Hyderabad
Net worth of TC
Rs. 8504.41
(31.12.2013)
Listed At
BSE
Industry of TC
Cement
Acquirers
Chettinad Cement
Corporation Limited Target Company
M/s Thames Liners
Limited
Registered Office
Mumbai
Net worth of TC
Rs. 70.57 Lacs
(30.09.2013)
Listed At
CSE
Industry of TC
Finance
Acquirer
M/s DSK Capital
Advisors LLP
Details of the offer: Offer to acquire upto 5,100
(2.08%) Equity Shares at a price of Rs. 30/- per
fully paid up equity share payable in cash.
Triggering Event: Share Purchase Agreement
(SPA) for the acquisition of 1,78,900 (73.02%) Equity
Shares and control over Target Company.

12. 12
Case Study
SEBI’s VIEW on the SCHEMe of Arrangement of Aashee
Infotech Limited
FACTS OF THE CASE
M/s Aashee Infotech Limited (“Transferee Company”), proposed a composite scheme of
arrangement, broadly categorized under two parts
• Re - organization of its share capital, by way of reduction of its existing paid up share capital by
90% by way of adjustment of with existing accumulated losses;
• Amalgamation of M/s Jatalia Global Venture Limited, M/s Lusa Private Limited, M/s Jatalia
Industrial Park Private Limited and M/s Surya Soft-tech Limited (collectively referred as
(“Transferor Companies”) with M/s Aashee Infotech Limited, the Transferee Company;
KEY FEATURES OF THE SCHEME IS AS UNDER:
• Reduction of Paid up Share Capital of M/s Surya Soft-tech Limited by 98% by way of
adjustments with existing accumulated losses;
• Para 12 of the scheme of arrangement, provides for change in control and management of the
Transferee Company;
• Para 9 of the scheme of arrangement, provides that, swapping of the name of the Transferee
Company with that of one of the Transferor Company i.e. M/s Jatalia Global Venture Limited;
[i.e. upon scheme becoming effective, the promoters and directors of M/s Jatalia Global
Ventures Limited, shall become, the promoters and directors of the Transferee Company, thereby, all the existing
directors and promoters, shall cease to be the promoter and director of the Transferee Company]
• Clause C of Para 10 of the scheme of arrangement, provides for replacement of existing Main
Objects in Memorandum of Association, with the clauses as stated under the scheme;
• By virtue of issuance of shares to the shareholders of the Transferor Companies, the public
shareholding to be impacted;
The Transferee Company in accordance with the provisions of clause 24 (f) of the Listing
Agreement, followed by SEBI Circulars CIR/CFD/DIL/5/2013 dated 4th
March, 2013 and

13. 13
CIR/CFD/DIL/8/2013 dated 21st
May, 2013, made an application to Stock Exchange/ SEBI, for
their in principle approval to the scheme of arrangement;
STOCK EXCHANGE OBSERVATION
Stock Exchange vide its letter dated March 19th
, 2014, conveyed that it is unable to grant its ‘No
Objection’ to the scheme of arrangement, as SEBI has observation, which, inter alia includes
the following:
1. Dilution in public shareholding of the Transferee Company is not in accordance with SCRR
(1957) and the Listing Agreement;
2. Achieving listing status without complying with SCRR (1957) and ICDR Regulations (2009)
3. Change in control and management of the Transferee Company, without providing an exit
opportunity – circumvention of obligations under SEBI SAST Regulation 2011
4. Increasing shareholding through preferential allotment – an attempt to bypass preferential issue
guideline as per ICDR (2009)
SEBI OBSERVATION
o The public shareholding in Listed Transferee Company prior to the scheme of Arrangement
stands at 77.96% held by 3,051 Shareholders. Post the Scheme the same public shareholding
shall get reduced to 1.93%(approx)
DILUTION IN PUBLIC SHAREHOLDING OF TRANSFEREE COMPANY WHICH IS NOT IN
ACCORDANCE WITH PROVISIONS OF SECURITIES CONTRACTS (REGULATIONS)
RULES, 1957 (SCRR) AND LISTING AGREEMENTS.
o Further, in term of Rule 19A of SCRR, as amended on June 4, 2010 every Listed Company
(other than public sector Company) shall maintain public shareholding of at least 25%. The
object of this minimum shareholding requirement is to ensure the availability of minimum portion
/ no. of shares (floating stock) of the listed company with the public.
o As against the requirement, post scheme, the public shareholding gets reduced to 1.93%.
However, in the post scheme the shareholding pattern, the public shareholding is shown as
38.46% comprising of (i) the pre-scheme public shareholders of Transferee Company (1.93% -
3051 shareholders), (ii) the outgoing promoters of Transferee Company (0.54% holding 3
Shareholders) and some of the shareholders of Transferor Companies (Unlisted
Companies) (35.99% - 142 Shareholders.

14. 14
o Thus SEBI has view that actual public shareholding in the post merged entity would be only
1.93%. Therefore, this is not in compliance with the requirement of Rule 19A of the SCRR and
Clause 40A of Listing Agreements. Such a non compliance would defeat the objective of
minimum public shareholding norm.
o An unlisted company, in order to get listed is required to go through Initial Public Offer (IPO)
route by complying with the provisions of Rule 19(2)(b) of SCRR and ICDR;
ACHIEVING LISTED STATUS WITHOUT COMPLYING WITH THE REQUIREMENT OF SCRR
AND ICDR
o The said IPO process involves a due diligence processes conducted by a SEBI, Registered
Merchant Banker, filling of a draft offer documents with SEBI / Stock Exchange / Merchant
Banker, disseminating the draft offer documents on the website of SEBI / Stock Exchange /
Merchant Banker, in principle approval by Stock Exchange, processing of the same by SEBI to
ensure adequacy of disclosures, issuance of observation by SEBI, filling of prospectus with
RoC, Publication etc.
o As the listing of Transferor Companies is being achieved through a scheme of arrangement, the
unlisted companies do not offer at least 25% of the shares of the companies in terms of Rule
19(2)(b) of SCRR.
o The Scheme of Arrangement, envisaged in the instant case does not provide adequate
information of the Unlisted Companies with regards to the background of the promoters, capital
structure, history of the company, financial details, management of the company, government
and others approval required for the business, risk factors associated with the business as no
prospectus is prepared;
o Without the complying with the aforesaid regulatory requirement, the unlisted transferor
companies will enjoy the benefit of listing as above, which they are not entitled to;
o The scheme of Arrangement also envisages change in promoters and management of the
Listed Company. Such a change in the promoters effectively is change in control over the
Company;
CHANGE IN CONTROL OVER TRANSFEREE COMPANY WITHOUT PROVIDING AN EXIT
OPPORTUNITY- AN ATTEMPT TO CIRCUMVENT THE OBLIGATIONS UNDER TAKEOVER
REGULATIONS
o SEBI in order to protect the interest of Investors has put into place for Takeover Regulations.
The Takeover Regulation seeks to ensure that the substantial acquisition of shares and / or

15. 15
Control over a listed company in the securities market take place in a fair, equitable and
transparent manner;
o The regulations require the incoming promoters to make an open offer before acquiring the
control over the Target Company. However, it may be argued that such change in
management and control is exempt from the applicability of Takeover Regulation under
Regulation 10(1)(d)(ii);
o The change in control is taking place without any exit opportunity to the public shareholders of
the listed entity. Moreover, the shareholding of erstwhile public shareholders of the listed entity
would get reduced to irrelevant percentage in the post scheme capital, i.e. from 77% to 1.93%.
Thus, the change in control is being achieved without going through a transparent mechanism
of open offer processes envisaged in the Takeover Regulation. Thus, the principles underlying
the regulations have also been defeated because of this non-transparent and opaque method
adopted through the scheme of Arrangement;
o SEBI has a view that, the present scheme appears to have been designed as an article to
circumvent the compliance with the provisions of Takeover Regulations and surreptitiously
claiming exemption from the applicability of the Takeover Regulation under regulation
10(1)(d)(ii).
o A Listed Company going for preferential allotment has to comply with the requirements
contained in Chapter VII of ICDR, in addition to the requirements specified in the Companies
Act;
INCREASING SHAREHOLDING THROUGH PREFERENTIAL ALLOTMENT – AN ATTEMPT
TO BYPASS THE PREFERENTIAL ISSUE GUIDELINE UNDER ICDR
o In the instant case, the shares of the listed company are reportedly issued to the shareholders
of the unlisted companies as consideration for the merger;
o However, it may be argued that such preferential allotment would be exempt from applicability
of Chapter VII of ICDR under regulation 70(1)(b). the exemption is provided where the
preferential allotment is made pursuant to a scheme approved by the High Court u/s 391-394 of
the Companies Act, 1956 . in the instant case, the consideration for merger of the assets of the
unlisted companies with the listed companies is paid through the preferential allotment of shares
as part of the scheme in order to avail the exemption under the said regulation.

16. 16
In Nutshell,
 SEBI is of view that the actual holding in the post amalgamated entity would be only 1.93%,
hence, there will not be depth in the market and the price of the security would be prone to
manipulation. Further, there will not be liquidity in trading and discovery of fair price is unlikely;
 As listing of the unlisted companies is being achieved through backdoor as part of the scheme,
this would jeopardize and tarnish the image of the securities market as a non- transparent and
inefficient way of raising capital and listing.
 The scheme of arrangement in its current form resulting in change in control over the listed
company will be detrimental to the public shareholders of Transferee Company as the change
in control is achieved through a non- transparent, inequitable and unfair method;
 As part of the scheme, the shareholders of the unlisted companies are receiving shares of the
listed company as consideration. Such an acquisition is being done as a preferential allotment
without complying with the regulatory requirements. The shareholders of the unlisted
companies are receiving marketable securities of the listed company in lieu of the shares of the
unlisted companies which may not be marketable which tantamount to undue enrichment.

17. 17
Acquisition of IDBI's Stake in Stock Holding Corp by IFCI
IDBI’s has sold its entire holding of 18.95% in Stock Holding Corporation of India to IFCI for an
undisclosed amount. The deal hikes IFCI’s stake in its associate company to 52.86% from
33.91%. IDBI Limited was planning to sell its stake in the custodian and had offered its stake to
other shareholders of the company which include GIC (14%) and SUUTI and LIC with (17%)
each. However after evaluation IFCI agreed to purchase the stake.
American Express Acquires Stake In Ezetap
Credit card issuer American Express has acquired a minority stake in payment device
maker Ezetap Private Limited. The funds will be used to expand in markets of South East Asia and
Africa. Bangalore based Ezetap had earlier received venture funding of Rs 49.8 Cr from a
consortium of investors led by Helion Venture Pr.
Unitech Sells Land Parcels In South
Realty firm Unitech Limited Limited has sold almost 10 acres of land in Bangalore and Mysore to
local developers for about Rs 100-130 Cr to repay debt.
The company currently has a debt of about Rs 6200 Cr including Rs 150-200 Cr from Life Insurance
Corporation. The land parcels are non-core assets of the company, the proceeds of which will be
used to repay debt.
Market Updates

18. 18
Disclaimer:
This paper is a copyright of Corporate Professionals (India) Pvt. Ltd. The entire contents of this paper
have been developed on the basis of SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997 and latest prevailing SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011 in India. The author and the company expressly disclaim all and any liability to any
person who has read this paper, or otherwise, in respect of anything, and of consequences of
anything done, or omitted to be done by any such person in reliance upon the contents of this paper.
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