Company Law Board
Gujarat Machinery Manufacturers ... vs Nile Ltd. on 1 November, 2000
ORDER Balasubramanlan, Vice-Chairman
1. The petitioner in CP No. 15 (GMM for short) is the holding company of Karamsad--the petitioner in the other petitions. The first respondent company (the company) is common in all these petitions. Since the facts and circumstances in these petitions are inter-linked they are being disposed of by this common single order.
2. A brief of the facts in this case arc that GMM had acquired 2,86,200 equity shares (CP 15 of 1998) of the company during the period 23-4-1997 to 11-2-1998. Likewise, Kararnsad acquired 10,000 shares (CP 22 of 1998) of the company during the period 30-6-1997 to 11-2-1998. These shares together constituted 9.91 per cent of the shares of the company. These share were lodged with the company for registration of transfer on 9-4-1998 and 4-9-1998 respectively. While the registration was pending, Karamsad decided to acquire further shares of company and accordingly a public announcement was made through newspapers on 21-4-1998 to acquire 6,00,380 shares representing 20 per cent of the subscribed equity share capital of the company at a price of Rs. 40 per share. This was done in terms of SEBI (Substantial Acquisition of Shares and Takeovers) Regulation, 1997 (Takeover Code). The acquirer was in a position to acquire through public offer 18,300 shares (CP No. 21 of 1998). In the meanwhile, it had also acquired through the Stock Exchange and negoti-
Ated Deal, A Further 3,15,595 Shares (CP No. 23 Of 1998). When The Petitioners Sought Registration Of 2,86,200 And 10,000 Shares Acquired By Them Respectively, The Company Refused Registration Of The Transfers And The Same Was Communicated To The Petitioners On 7-5-1998. Aggrieved By This Refusal, The Petitioners Wrote To The Company On 12-5-1995 Seeking The Reasons For Such A Refusal. The Company, By A Letter Dated 11-5-1998 Complained To The Department Of The Company Affairs That GMM And Its Associates Were Acquiring The Shares In The Respondent Company In Violation Of The Provisions Of Section 108A Of The Companies Act ('The Act') And As Such Sought For Taking Necessary Action In This Regard. It appears that GMM also made a reference to the Central Government regarding the applicability of section 108A of the Act for acquiring shares in the respondent company. The Central Government passed an order on 24-7-1998 holding that GMM was a dominant undertaking and as such the provisions of section 108A were applicable in the acquisition of shares in the company. GMM has challenged the order of the Central Government in Bombay High Court which is pending. The board of directors of the company had also rejected the transfer of the shares acquired during the public offer in September 1998. Thus the company had rejected the registration of transfer of all the shares impugned in the above four petitions and hence the petitioners have filed these petitions under section 111A of the Act for a direction to the company to register the shares in favour of the petitioners.
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