Request under the SEBI (Informal Guidance) Scheme, 2003

 

GENERAL MANAGER

DIVISION OF CORPORATE RESTRUCTURING

Tel. 22823886 Fax – 22829520

Email - mdrao@sebi.gov.in

CFD/DCR/AK/IG/11442/04

June 02, 2004

IL&FS Investmart Limited,

The IL&FS Financial Centre,

Plot C-22, G Block,

Bandra Kurla Complex,

Bandra (E),

Mumbai – 400 051.

Dear Sir,

 

Sub.: Request under the SEBI (Informal Guidance) Scheme, 2003

 

Ref : Your letters dated 19.01.04 and 03.05.04

 

 
1. Please refer to your letters cited above seeking "interpretive letter" under the SEBI (Informal Guidance) Scheme, 2003. The interpretive letter is sought in respect of proposed buy back of Britannia Industries Ltd.(BIL).

 

2. It is, inter-alia, informed by you vide your letters under reference and further information submitted by you and BIL vide its letter dated 14.05.04 that-

 

1.  
   1.  
      1. BIL is a company listed on BSE, NSE & other Stock Exchanges. The BIL was incorporated in 1918 under the provisions of The Indian Companies Act 1913. It was initially listed on CSE during second quarter of 1900.
         
         
      2. In the year 1956, the Non Promoter holding in the BIL was 41.20%.
         
         
      3. The BIL made a public issue of shares in 1977-78 under a RBI directive as per the requirement of FERA.
         
         
      4. The BIL made two buy backs during Financial Years 2002 and 2003.
         
         
      5. The BIL has taken shareholders approval for the third buy back proposal for an amount not exceeding Rs. 780 million at a price not exceeding Rs. 650 per equity shares upto a maximum of 2.50 million equity shares. The present promoters’ holding in BIL is 48.48% of the total equity shares of the BIL.
         
         
      6. The non promoter holding pursuant to the proposed buy back will be 49%.

 

 
2. The clarification is sought on the applicability of the Continuous listing norms to BIL.

 

3. Without necessarily agreeing with your analysis, it is observed that as per Clause 40A (iii) of the listing agreement, the company shall not make preferential allotment or an offer to buy back its securities, if such allotment or offer results in reducing the non-promoter holding below the limit of public shareholding specified under the SEBI (Disclosure and Investor Protection) Guidelines, as applicable at the time of initial listing. As per the information submitted by you the available data regarding non promoter shareholding of the company in the year 1956 is 41.20% and that pursuant to the proposed buy back the non promoter shareholding in BIL will be 49%. In view of these particular submissions, we are of the view that the proposed buy back of shares by BIL will be in conformity with the continuous listing requirements.
   
   
   
4. This position is based on the representation made to the Department/ Division in your letter. Different facts or conditions might require a different result.

 

5. This letter expresses the Departments/Division’s position on enforcement action only. It does not express decision of the Board on the questions presented.

 

6. You may note that the above views are expressed only with respect to the clarification sought on the applicability of the continuous listing requirements specified in the listing agreement on the basis of your submissions and do not affect the applicability of any other law or requirement.

 

Yours faithfully,

S V Muralidhar Rao