IN THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
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Date of Hearing
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15/03/2005
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Date of Decision
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15/03/2005
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Appeal Nos: 152, 152A & 152B of 2003
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C.L. Jaiwanth
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Appellants – Represented by:
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C.L.Jaisimha
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None
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Shobha Jaiwanth
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Versus
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Securities & Exchange Board of India
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Respondent- Represented by
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Mr. Kumar Desai, Advocate
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CORAM
Justice Kumar Rajaratnam, Presiding Officer
1. The appeals are taken up for disposal.
2. The appellants are the promoters of CSJ Technologies Limited. The appellants had acquired 10,30,400 equity shares representing 14.35% of the voting capital of shares of CSJ Technologies Limited (‘CSJTL’ for short) through preferential allotment on 28/11/2002. As per the report dated 18/12/2002 filed by the acquirers with the Respondent under Regulation 3(4) of SEBI (Substantial Acquisition of Shares of Shares and Takeover) Regulations, 1997, the appellants were holding 32,49,855 shares i.e., 52.85% of the total paid up capital of the company. Pursuant to the acquisition of 10,30,400 shares of CSJTL on 28/11/2002 their shareholding increased to 59.61%, an increase of 6.76%, i.e., more than the limit of 5% specified under Regulation 11(1) of SEBI (Substantial Acquisition of Shares and Takeover) Regulations. The appellants instead of making an open offer in compliance with the requirements of Regulation 11(1) vide their report filed under Regulation 3(4) of the SEBI (SAST) Regulations claimed exemption under Regulation 3(1)(c) from the applicability of Regulation 11(1) of the Regulations.
3. The Respondent issued a show cause notice dated 24/01/2003 stating that pursuant to the aforesaid acquisition a public announcement was required to be made by the acquirers in terms of Regulation 14(1) of the SEBI (SAST) Regulations within 4 working days from the date of 28/11/2002, and as the appellants acquired the said shares/voting rights and control of the company without making a public announcement, the appellants prima facie violated the provisions of the Regulation 11(1) read with Regulation 14(1) of the SEBI (SAST) Regulations and are therefore liable for penal action under the SEBI (SAST) Regulations and SEBI Act, 1992.
4. The appellants submitted their reply vide letter dated 01/02/2003. The respondent, after perusing the reply dated 01/02/2003, passed an order dated 25/06/2003 directing the appellants to make a public announcement as required under Chapter III of SEBI (SAST) Regulations in terms of Regulation 11(1) taking 03/08/2002 as the reference date for calculation of offer price, within 45 days of passing of the order, and also directed to pay interest @ 10% per annum to the shareholders for the loss of interest caused to them from 04/04/2003 till the date of actual payment of consideration for the shares to be tendered/accepted.
5. Being aggrieved by the above order, the appellants filed the present appeals.
6. The matter was called on various dates after admission i.e., on 05/04/2004, 09/09/2004, 14/10/2004 and 16/12/2004. On 16/12/2004 since there was no representation either by the appellants or by its counsel, therefore the Tribunal directed issue of fresh notice posting the appeals for hearing finally on 09/03/2005. The notice was sent by speed post which was returned with the endorsement to the effect that “not claimed”. The Tribunal, since there was no representation either by the appellants or by its counsel on 09/03/2005 and the notice of hearing was returned unclaimed, further directed the respondent to file an application for treating this as served and treat the appellants as ex-parte.
7. The matter was called today. There was no representation from the appellants. This Court has no alternative except to dismiss these appeals for non-prosecution with liberty for the appellant to move the Tribunal to review this order by filing an affidavit to establish before the Tribunal that the non-appearance of the appellants was bonafide. If such an application is made and if in accordance with law, the Tribunal will hear the review petition.
8. The appeal is dismissed with the above observation. No order as to costs. Registry is directed to send a copy of this order by Registered Post to the address of the appellant as shown in the memo of appeal.
(Pronounced in Court)
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(Justice Kumar Rajaratnam)
Presiding Officer
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Place: Mumbai
Date: 15/03/2005
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