View Attachment - TakeoverCode.com

DEPUTY GENERAL MANAGER
CORPORATION FINANCE DEPARTMENT
DIVISION OF CORPORATE RESTRUCTURING
Tel.: 26449380
October 10, 2008
CFD/DCR/SKM/IG/ /2008
Pankaj Kumar Mahajan,
#253, Sector – 4,
Panchkula
Haryana.
Sub: Request for Informal Guidance under SEBI (Informal
Guidance) Scheme, 2003
Ref: Your letter dated January 28, 2008 & April 21, 2008.
1.0 Please refer to your letter quoted above seeking ‘Interpretive
Letter’ under the SEBI (Informal Guidance) Scheme, 2003. You
have sought interpretive letter on whether the provisions of SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations,
1997 {hereinafter referred to as ‘the Takeover Regulations’} will
be attracted on the proposed transfer of shares inter se amongst
promoters as represented in your letter.
2.0 You have inter alia represented as follows:
2.1 An agreement has been entered into between Mr. Pankaj K.
Mahajan and Mr. P.J.Singh along with his wife Mrs. Rajinder Kaur
on 19.12.2006. Pursuant to the said agreement, it has been
proposed as under:
i) Acquisition of 2,06,080 no. of shares (23.26%) in the capital of
Shivalik Agro Poly Products Limited (SAPL), listed with The Delhi
Stock Exchange Association Limited, New Delhi by Mr. P.K.
Mahajan from Mr. P.J. Singh.
ii) Acquisition of 79262 no. of shares (8.95%) in the capital of
SAPL by Mr. P.K. Mahajan from Mrs Rajinder Kaur wife of Mr.
P.J. Singh.

iii) Acquisition of 10000 no. of shares(50%) by Mr. P.K. Mahajan in
the capital of PP Perfect Pacs Pvt. Ltd. from Mr. P.J. Singh and
his wife Mrs. Rajinder Kaur, which holds & shall continue to hold
85679 (9.67%) equity shares in the target company.
2.2 Both Mr. Pankaj K. Mahajan and Mr. P.J. Singh are part of the
promoters group of Shivalik Agro Poly Products Limited (SAPL)
for more than three years as also have been holding shares in
SAPL for more than three years before the present agreement
dated 19.12.2006, as has been disclosed to the company as also
to the stock exchange, and the transaction is inter se promoters.
The transferor and the transferee have complied with regulation
6, 7 and 8 of the Regulations as may be applicable to them. The
company in turn has also filed requisite disclosures under
Regulation 8 of the regulations. Besides, the price at which the
shares are being transferred between them is at a price of
Rs.20/- per share which is not exceeding 25% of the price as
determined in terms of sub regulation (4) and (5) of regulation
20 of the regulations. Hence, the transaction falls under
Regulation 3(1)(e)(iii)(b) of the Regulations.
2.3 Mrs. Rajinder Kaur falls under the definition of promoter being wife
of Mr. P.J.Singh. The transferor and the transferee have complied
with regulation 6, 7 and 8 of the Regulations as may be
applicable to them. The company in turn has also filed requisite
disclosures under Regulation 8 of these regulations. Besides, the
price at which the shares are being transferred between them is
at a price of Rs.20/- per share which is not exceeding 25% of the
price as determined in terms of sub regulation (4) and (5) of
regulation 20 of the regulations. The holding of Mrs Rajinder Kaur
being PAC with the promoters be also treated with them.Hence,
the transaction falls under Regulation 3(1) (e) (iii) (b) of the
Regulations.

2.4 PP Perfect Pacs Private Limited (PP) became promoter
independently because of the fact that Mr. Pankaj K. Mahajan
already held more than 10% in PP which in turn hold 85,679
(9.67%) equity in Shivalik Agro Poly Products Limited, and
holding of PP in Shivalik Agro Poly Products Limited is not being
transferred as such regulation 20 does not attract in this
transaction. Further, the transferor and the transferee have
complied with regulation 6, 7 and 8 of the Regulations as may be
applicable to them. The company in turn has also filed requisite
disclosures under Regulation 8 of the regulations. The holding of
PP being PAC with the promoters be also treated with them.
Hence, the transaction falls under Regulation 3(1) (e) (iii) (b) of
the Regulations.
2.5 Mr. Pankaj K. Mahajan the proposed acquirer is already holding
more than 50% of the holding of the promoter group alongwith
the holding of Dr. G. D. Tyagi, Mr. R.C. Gupta and PP Perfect. Mr.
Pankaj K. Mahajan has been controlling affairs of the company as
Managing Director since last three years. With the proposed
acquisition of shares and Mr. P. J. Singh moving out as Chairman
the control of Mr. Pankaj K. Mahajan & associates remains the
same. Hence, the transaction does not trigger regulation 12.
2.6 All the transactions as stated above falls under Regulation
3(1)(e)(iii)(b) of the Regulations, and Regulation 10,11 and 12 of
the regulations does not apply to the above transactions.
2.7 Mr. P.J.Singh, the transferor in the instant matter joined with the
then promoters as part of the promoters group in the year 2001-
02 as was disclosed in the disclosure filed for the year ended on
31.03.2002 under Regulation 8(3) of the Regulations. Mr.
P.J.Singh joined with the then promoters by virtue of clause
2(1)(e)(2)(iii) of the Regulations.
2.8 Transferor and transferee are disclosed under promoters category
in the declaration made to the Delhi Stock Exchange under clause
35 of the Listing Agreement.

3.0 Without necessarily agreeing with your analysis , our views on
the issue raised by you are as under:
3.1 As per regulation 3(1)(e)(iii)(b) of the Takeover Regulations, an
acquisition pursuant to inter se transfer of shares amongst
promoters is eligible for exemption from the applicability of the
regulations 10,11,12 of the Takeover Regulations subject to
complying with the following conditions i.e.
3.1.1 The transferors and transferees are qualifying promoters in terms
of the explanation to regulation 3(1)(e)(iii) of the Takeover
Regulations.
3.1.2 The transferees collectively as well as the transferors collectively
have been holding the shares in the target company for a period
of at least three (3) years prior to the date of acquisition.
3.1.3 The provisions of Chapter II of the Takeover Regulations have
been complied with within the specified time-limit by both, the
transferors and the transferees.
3.1.4 The inter se transfer of shares should not be at a price exceeding
25% of the price determined in terms of regulations 20(4) and
20(5) of the Takeover Regulations.
3.1.5 The transferee should inform the stock exchange at least 4
working days in advance of the date of proposed acquisition in
case of acquisition exceeding 5% of the voting share capital of
the target company in terms of regulation 3(3) of the Takeover
Regulations.
3.1.6 The acquirer(s) shall file a report with Securities and Exchange
Board of India in the specified format within twenty one (21)
days of the date of acquisition along with requisite fees, in terms
of regulation 3(4) read with regulation 3(5) of the Takeover
Regulations.

4.0 From your letters under reference, it has been observed that you
have represented that in your case conditions as mentioned at
3.1.1 to 3.1.4 are fulfilled. Further you have represented that you
will fulfill the requirements as laid down in 3.1.5 and 3.1.6 as per
the Takeover Regulations. Therefore, the exemption under
regulation 3(1)(e)(iii)(b) will be available in your case.
5.0 The above position is based on the representation made to the
Department as per your letter under reference. Different facts or
conditions might require a different result. This letter does not
express decision of the Board on the question referred.
6.0 Please note that this position is only with respect to applicability
of regulation 3 (1) (e) (iii) of the SEBI (Substantial Acquisition of
Shares and Takeovers) Regulations, 1997 and does not affect
applicability of any law and other SEBI Regulations, Guidelines
and circulars administered by SEBI or any other authority.
Yours faithfully,
Soma Majumder