Request for no-action/interpretative letter - Matrix Laboratories Ltd

GENERAL MANAGER

DCR/AG/22853/03

December 4, 2003

Matrix Laboratories Ltd.

1-1-151/1, IV Floor,

Sairam Towers,

Alexandar Road,

Secunderabad - 500 003

Dear Sirs,

Sub: Request for no-action letter/interpretative letter under the SEBI (Informal Guidance) Scheme, 2003–Applicability of the SEBI (Substantial Acquisition of Shares And Takeovers) Regulations, 1997 {"the Regulations"}.

Ref : Your letter dated November 5, 2003 enclosing letter dated June 27, 2003

1. Please refer to your letters cited above, seeking No action Letter under SEBI (Informal Guidance) Scheme, 2003. The clarification is sought on the issue as to whether consequent upon the merger of Vorin Laboratories Ltd. into Matrix Laboratories Ltd, resulting in the deemed change in Management control of Fine Drugs & Chemicals Ltd. (FDCL) by operation of Law, takeover code is triggered. If so, what would be the after effects of the same.

 

2. It is, inter-alia, informed by you that

    

   1. Matrix, Vorin & FDCL are listed on BSE & HSE. Medicorp is listed on BSE & Chennai Stock Exchange.

    

   2. The Board of Directors of Vorin, Medicorp and Matrix at their meetings held on 19^th September, 2002 approved the proposal for merger of Vorin and Medicorp into Matrix. A composite Scheme of Merger was prepared. The Court convened EGM of the respective companies on the given dates and approved the merger.

    

   3. Matrix and Vorin received the order from the Hon’ble High Court of Andhra Pradesh on 8^th April 2003 sanctioning the Scheme of Amalgamation. However this approval was subject to the similar approval of the High Court of Madras for the merger of Medicorp as the scheme of Amalgamation was a composite scheme. The High Court of Madras approved the merger on 22^nd April, 2003, the order for which was delivered on 9^th May, 2003.

    

   4. The Board of Directors of Vorin met on 17^th May, 2003, Matrix and Medicorp on 18^th may 2003 respectively and took on record the said orders sanctioning the Scheme of Amalgamation. 

    

   5. The certified copies of these orders were filed with the ROC, Hyderabad, Andhra Pradesh and Chennai, on 19^th May, 2003 which is the effective date of the merger.

    

   6. Pursuant to the aforesaid Merger, the impact is as follows:

    

 

•  
  • Vorin and Medicorp ceased to exist and became part of Matrix effective 19^th May 2003.

   

  • Vorin was having the controlling stake in FDCL. Consequent to the merger of Vorin into Matrix, matrix became the controlling stakeholder in FDCL.

   

  • On 5^th June 2003 the Board of Directors of FDCL reconstituted with the resignation of erstwhile directors representing Vidyut Investments Ltd.

   

  • There is a deemed change in the Management control in FDCL which was through the merger of Vorin into Matrix pursuant of the aforesaid order.

 

1. Without necessarily agreeing with your analysis, it is observed from your submissions that as Vorin was having the controlling stake in FDCL, consequent to the aforesaid merger of Vorin into Matrix, Matrix became the controlling stakeholder in FDCL.

 

2. In terms of Regulation 3(1)(j)(ii) of the Regulations, acquisition pursuant to a scheme of arrangement or reconstruction including amalgamation or merger or de- merger under any law or regulation, Indian or foreign is exempted from the applicability of Reg. 10,11 and 12 of the Regulations.

 

3. This position is based on the representation made to the Division in your letter. Different facts or conditions might require a different result. This letter does not express decision of the Board on the questions referred.

 

4. You may note that the above views are expressed only with respect to the clarification sought on SEBI (Substantial Acquisition and Takeovers) Regulations, 1997 and do not affect the applicability of any other law or requirements.

 

Yours faithfully,

S V MURALI DHAR RAO