Some of my most significant suggestions to the SEBI committee for the review of Takeover Regulations were accepted.
SEBI had notified minimal changes in the Code –only 4. Vide notification dated November 06, 2009,
The amendment in Regulation 11 (1) is as per my suggestion.
Similarly I believe I was the first proponent of disallowing Non Compete fees. In the new draft My suggestion for disallowing Non-compete fees has been accepted.
Yet I am not happy because one of my main points – defining control & company so as to bring into the net asset sale route—Piramal, Gwalior chemicals, Orchid chemicals, Eicher motors, Zicom etc. involving G 1000+ Crs. has not been taken care of. I have brought this to the notice of SEBI time & again. I call it “THE BYPASS ROUTE TO SEBI TAKEOVER CODE”
I aired my feelings in an interview with NDTV.
You may simply click the link below to watch the interview which took place on 20 July 2010.
http://www.ndtv.com/news/videos/video_player.php?id=153390
The Businessline ( 21 July 2010) in its editorial also pointed this out as one of the three critical failures of TRAC.
About Me
- CA. Arun Goenka
- The Original CHAUKIDAAR ,“TAKEOVER WATCHMAN” since 2007. CA. Arun Goenka* hands-on experience in the share market* deep knowledge of laws and account*one of the early players, pioneered an investment strategy in TAKEOVERS*The WIRC - of The Institute of Chartered Accountants of India, has honoured him with the ‘Recognition of CAs in Social Service’. * often invited by National business news; electronic and print media, for his views on SEBI related matters. * history of red-flagging 100+ cases to SEBI* contributes by giving inputs in drafting amendments to the regulation* Some of the suggestions reflected in subsequent regulatory changes: (a). In takeover of Cairn 3,750 Crores non-compete fees waived off and ultimately Removal of Non-compete fee in 2011 (b) November 2009 amending Regulation 11 (1). (c)Listing agreement baring promoters from voting on related party. (d) Disclosure of past performance by merchant bankers in case of IPO (e) SAST 2011 regulation 10(1)(h), (f) Counter Offer in case of Delisting (g) Interest payment to all in case of delays in Open Offers(05.06.20).
Thursday, July 22, 2010
Golden Tobacco
Ref. Open Offer of Golden Tobacco Ltd.
The above referred Open offer is now pending for a long time. The date of PA is 12th Nov 2009.
I wish to bring the following to your notice for further examination & necessary action for early completion/disposal of the Offer:
1. The offer is made by Mr Promod Jain and Pranidhi Holdings Pvt Ltd. Who hold 1,000 & 48,002 shares respectively, they had acquired 71,034 shares but have sold 22,032 shares (Ref: Para 1.3 of PA). The activity is trading in nature & not that of a person with serous intent to acquire.
2. PAC- JP Financial Services Pvt Ltd holds 10.9 lac shares together the acquirer and PAC hold 11.39 Lac shares or 6.47% of the equity of the target company.
3. Pramod Jain whose educational qualification is not given but his age and experience is given as 43 years and 25 years of experience in financial consultancy service. It will be interesting to find what kind of financial consultancy he was giving at the age of 18 and who were his clients.
4. Pranidhi holding although reporting losses have substantial amount as reserves. How was this reserve built up is a point to be examined. In case the reserve was built up from share premium account, who are their subscribers/share holders to take share at such hefty premium for a company who is reporting losses.
5. JP Financial is the major holder but it is not the main acquirer, it is acting only as a PAC. Why the prominent player is assuming a secondary role?
6. The objective for the offer is stated to be “ in the nature of strategic investment for diversification and growth and to reap the benefits of corporate opportunities” (Para 4.3)
7. Pranidhi holding is currently engaged in activities of investment in shares and securities and real estate projects.
8. JP Financial is engaged in engaged in activities of investment in shares and securities and providing loans and advances. JPFSPL is registered with RBI as an NBFC having Reg No: 0501828
9. It will be interesting to find whether these finance and investment companies have changed their object clause to start industrial activity for manufacturing of cigarettes.
10. Has JP Finance Informed RBI about its proposed Diversification and obtained its consent?
11. PAC has pledged 10Lac shares of Techno electric (clause 7.3) however there is not sufficient liquidity in these shares and the net worth of the acquirer is 151.25 lacs only.
12. The PAC – JP Financial not only holds More than 20 Times the number of shares held by the acquirer they have also almost entirely made the financial arrangement for the open offer. Why are they playing second fiddle as PAC rather than as an acquirer?
13. The Acquirers have time and again displayed that they are not seriously interested in the Open offer or the takeover of the company. They have resorted to this tactic for some other reason. The PA originally announced on 12 Nov 2009 has not been acted upon or pursed vigorously. From some media interview it is clear that the Open offer has been announced just to put some pressure on the management in order to settle some other score.
In the light of the above you are requested to please investigate the matter and ask the Acquirer to pursue the Open offer in an honest manner and conclude it at the earliest and in case you find that there is lack of seriousness or the actual purpose of the offer is other than what has been stated, you may ask the acquirer to withdraw the Open offer. Another significant point to be noted is that the market price of share is constantly higher than the offer price of Rs. 101/- and the Acquirers presently hold only 6.47% shares with no hope of getting any shares in the Open offer.
CC
VC CORPORATE ADVISORS PRIVATE LIMITED
SEBI Registration No. INM000011096
(Contact Person: Mr. Anup Kumar Sharma)
31, Ganesh Chandra Avenue, 2nd Floor,
Suite No –2C, Kolkata – 700 013, Ph: (033) 2225-3940/ 3941/ 4116
The above referred Open offer is now pending for a long time. The date of PA is 12th Nov 2009.
I wish to bring the following to your notice for further examination & necessary action for early completion/disposal of the Offer:
1. The offer is made by Mr Promod Jain and Pranidhi Holdings Pvt Ltd. Who hold 1,000 & 48,002 shares respectively, they had acquired 71,034 shares but have sold 22,032 shares (Ref: Para 1.3 of PA). The activity is trading in nature & not that of a person with serous intent to acquire.
2. PAC- JP Financial Services Pvt Ltd holds 10.9 lac shares together the acquirer and PAC hold 11.39 Lac shares or 6.47% of the equity of the target company.
3. Pramod Jain whose educational qualification is not given but his age and experience is given as 43 years and 25 years of experience in financial consultancy service. It will be interesting to find what kind of financial consultancy he was giving at the age of 18 and who were his clients.
4. Pranidhi holding although reporting losses have substantial amount as reserves. How was this reserve built up is a point to be examined. In case the reserve was built up from share premium account, who are their subscribers/share holders to take share at such hefty premium for a company who is reporting losses.
5. JP Financial is the major holder but it is not the main acquirer, it is acting only as a PAC. Why the prominent player is assuming a secondary role?
6. The objective for the offer is stated to be “ in the nature of strategic investment for diversification and growth and to reap the benefits of corporate opportunities” (Para 4.3)
7. Pranidhi holding is currently engaged in activities of investment in shares and securities and real estate projects.
8. JP Financial is engaged in engaged in activities of investment in shares and securities and providing loans and advances. JPFSPL is registered with RBI as an NBFC having Reg No: 0501828
9. It will be interesting to find whether these finance and investment companies have changed their object clause to start industrial activity for manufacturing of cigarettes.
10. Has JP Finance Informed RBI about its proposed Diversification and obtained its consent?
11. PAC has pledged 10Lac shares of Techno electric (clause 7.3) however there is not sufficient liquidity in these shares and the net worth of the acquirer is 151.25 lacs only.
12. The PAC – JP Financial not only holds More than 20 Times the number of shares held by the acquirer they have also almost entirely made the financial arrangement for the open offer. Why are they playing second fiddle as PAC rather than as an acquirer?
13. The Acquirers have time and again displayed that they are not seriously interested in the Open offer or the takeover of the company. They have resorted to this tactic for some other reason. The PA originally announced on 12 Nov 2009 has not been acted upon or pursed vigorously. From some media interview it is clear that the Open offer has been announced just to put some pressure on the management in order to settle some other score.
In the light of the above you are requested to please investigate the matter and ask the Acquirer to pursue the Open offer in an honest manner and conclude it at the earliest and in case you find that there is lack of seriousness or the actual purpose of the offer is other than what has been stated, you may ask the acquirer to withdraw the Open offer. Another significant point to be noted is that the market price of share is constantly higher than the offer price of Rs. 101/- and the Acquirers presently hold only 6.47% shares with no hope of getting any shares in the Open offer.
CC
VC CORPORATE ADVISORS PRIVATE LIMITED
SEBI Registration No. INM000011096
(Contact Person: Mr. Anup Kumar Sharma)
31, Ganesh Chandra Avenue, 2nd Floor,
Suite No –2C, Kolkata – 700 013, Ph: (033) 2225-3940/ 3941/ 4116
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