SEBI rejects Sun Pharma takeover offer plea

MUMBAI, July 17: Sebi has rejected an application by Sun Pharmaceutical Industries Ltd, along with Virtuous Finance Ltd VFL, Jeevanrekh...

MUMBAI, July 17: Sebi has rejected an application by Sun Pharmaceutical Industries Ltd, along with Virtuous Finance Ltd VFL, Jeevanrekha Investrade Pvt Ltd JIPL and Package Investrade Pvt Ltd PIPL, seeking an exemption from making an open offer for acquiring 32,07,500 equity shares representing 20.17 per cent of the equity capital of Gujarat Lyka Organics Ltd, the target company. The acquisition was being made from Virtuous Finance Ltd, Jeevanrekha Investrade Pvt Ltd and Package Investrade Pvt Ltd, the offerors.

The Sebi release says that the takeover panel considered the application and recommended that the exemption sought may not be granted as the applicants had failed to substantiate their statement that they are companies coming within the definition of quot;groupquot; as defined in the Regulations.

The acquirer8217;s application said that it was necessary and imperative to increase their shareholding in Gujarat Lyka Organics to develop the business activities of the target company. The target company hasa bulk drug manufacturing plant at Ankleshwar which is close to the acquirer8217;s plant at Panoli.

The application states that as on November 28, 1997, VFL held 16,47,500 equity shares of Rs 10 each, JIPL held 7,80,000 equity shares of Rs 10 each and PIPL holds 7,80,000 equity shares of Rs 10 each in the target company.

The application states that by virtue of the acquirer8217;s and the other concerns8217; investment in the equity share capital of the target company and managerial and other support given to them by the acquirer and the offerors, the applicants are deemed to be promoter companies of the target company alongwith Mr H I Gandhi and others.

The proposed transfer of equity shares of the target company, is hence, interse transfer within promoters. On this footing, the acquirer had sought an exemption under sub-clause b of clause e of sub-regulation i of Regulation 3 of the Sebi Substantial Acquisition of Shares and Takeovers Regulations, 1997.