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July 21, 2008

An interesting new big New Shareholder in Indiabulls Real Estate

There’s an Interesting New Shareholder with over 1% stake in Indiabulls Real Estate

http://www.bseindia.com/shareholding/shareholdingPattern.asp?scripcd=532832&qtrid=58

Gauri Avinash Bhosale holds 2837252 equity shares constituting 1.1% of total equity.This is an investment of over Rs 86 crores at todays closing of Rs 305

She was not holding this as on March 31,2008.She is the wife of Pune based property magnate Avinash Bhosale who was in the news sometime ago when he walked through the Green Channel without declaring an expensive watch he had got with him and faces charges of evasion of Customs Duty etc.

Thanks RH for pointing this out.

Nirma disallowed to withdraw offer for Shree Rama Multi-tech

Today’s edition of Business Standard carries in a regular column “Without Contempt” an article by Somasekhar Sundaresan….he highlights the dilemma of an Acquirer,one he discloses he has represented,…in that it on one hand it can be accused of violating the Insider Trading Regulations(In non Hostile takeovers),which prohibits communication or counselling of unpublished price-sensitive information and on the other hand can be stuck despite acute fraud (In Hostile situations)

Though Mr Sundaresan has chosen not to disclose which companies he is referring to as probably matter may go in appeal,anyone with a pulse on Indian Stock Markets would know he is alluding to the SAT order of June 5,2008 last month  http://www.sebi.gov.in/Index.jsp?contentDisp=SAT which upheld the SEBI Ruling that the Nirma Group could not withdraw the public announcement to buy out 20% of the shares of Shree Rama Multi-tech

The matter is really interesting…….In 2002, Nirma Group subscribed to 4894 secured optionally fully convertibles notes of Rs One Lakh each with a  nominal value of Rs 1.35 lakh each.These were issued by three group companies of Shree Rama Multi-tech.Furthermore 14288700 equity shares of Shree Rama Multi-tech too were pledged with the Nirma Group on this deal

When in 2005,there was a default on these notes,the Nirma Group chose to invoke the pledge and became owners of 24.25% of the Equity of Shree Rama Multi-tech. In keeping with the Takeover Code Regulations of SEBI they appointed a Merchant Banker who made the Public Announcement to acquire 20% of Equity shares of Shree Rama Multi-tech   and also filed with SEBI the Draft Letter Offer Document.

Then follows a great tale where Nirma tries to wriggle out of the Offerfirst they file for revision of the offer to current market price which had fallen significantly…this being disallowed they file for withdrawal of the offer bases on special circumstances.These circumstances relate to Nirma discovering later that Rs 326.48 crs have been siphoned off by the Promoters of Shree Rama Multi-tech.Nirma was relying on Sec 27 (1) d of the Takeover Code which allowed the withdrawal of the offer under ” such circumstances as in the opinion of the Board merit withdrawal”

SEBI refused to accept that the circumstances were in fact “such” and pointed out that Nirma should have done their due diligence before invoking the pledge and should not have acquired the shares if the circumstances so warranted. read more

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