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Request for No Action Letter - Arvind Mills Ltd

Jan 20, 2004
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Informal Guidance

GENERAL MANAGER

DIVISION OF CORPORATE RESTRUCTURING

DCR/MM/03/24657

December 31, 2003

The Arvind Mills Limited

Naroda Road,

Ahmedabad – 380 025

Dear Sirs,

 

Sub.: Request for No Action Letter under the SEBI (Informal Guidance) Scheme, 2003

 

Ref : Your letters dated November 17, 2003 and December 6, 2003

 

  1. Please refer to your letters cited above, seeking No Action Letter under SEBI (Informal Guidance) Scheme, 2003. The no action letter sought on the issue as to whether the proposed acquisition of 50.12% shares by The Arvind Mills Limited ("AML") from Asman Investments Limited ("AIL") in Arvind Products Limited ("APL/target company") would be exempt from the applicability of the SEBI (Substantial Acquisition of Shares And Takeovers) Regulations, 1997 {"the Regulations"} in terms of Regulation 3(1)(e)(i) of the Regulations.

    2.  

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

    3.  

  1. AML is a listed company holding 1.97% in APL/target company.

    2.  

  2. AIL is a wholly owned subsidiary of AML and holds 50.12% of the target company.

    3.  

  3. AML is a holding company of both AIL and the target company.

    4.  

  4. AIL wishes to divest its entire shareholding of 50.12% in target company in favour of AML.

    5.  

  5. AIL and AML are subsidiary and holding companies respectively and fall within the definition of Section 2(ef)(i) of the MRTP Act, 1969.

    6.  

  6. AIL and AML have been shown as a group in the last published Annual Report of the target company.

    7.  

  7. AIL and AML have complied with the provisions of Chapter II of the target company.

    8.  

  8. The transfer of shares from AIL to AML will not amount to a change in control over the target company.

    9.  

  9. Considering the above, whether the said transfer of shares would be eligible for exemption in terms of Regulation 3(1)(e)(i) of the captioned Regulations.

    10.  

  1. The department has examined your request and it is observed that AIL and AML fall under the definition of ‘group’ within the definition of group under MRTP Act, 1969 and their names have been disclosed as a group in the Annual report of the target company for the year 2002-2003. Further, AML and AIL have complied with the provisions of Regulation 8(2) for the year ended 2002-2003 and at the time of book closure in the year 2003.

    2.  

  2. Without necessarily agreeing with your analysis, it is observed that proposed acquisition of 50.12% shares of the target company by AML would be eligible for exemption from the applicability of the provisions of Regulations 10, 11 and 12 of the captioned Regulations, subject to compliance with the requirements of explanation (2) to Regulation 3(1)(e) by the transferee as well as transferor.

    3.  

  3. However, you are advised to note that AML would be required to comply with the provisions of Reg. 3(3) {i.e, information to be sent to Stock Exchanges at least 4 working days in advance of proposed acquisition} and with Reg. 3(4) read with Reg. 3(5) of the captioned Regulations {i.e, submission of a report with SEBI within 21 days of the date of the acquisition of shares/voting rights}.

    4.  

  4. 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.

    5.  

  5. 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 requirement.

    6.  

Yours faithfully,

S V MURALI DHAR RAO