Case Law Details
Vishvapradhan Commercial Pvt. Ltd. Vs Securities and Exchange Board of India (Securities Appellate Tribunal Mumbai)
Held that a perusal of Clause 36 of the listing agreement provides for a company to inform the exchange on immediate basis of all events which will have a bearing on the performance/ operations of the company as well as price sensitive information.
Facts-
A show cause notice dated December 20, 2016 was issued to show cause why suitable directions under Section 11(1) and 11(4) of the SEBI Act and Regulation 44 and 45 of the SAST Regulations, 1997 read with Regulation 32 and 35 of the SAST Regulations, 2011 should not be issued against VCPL (Vishvapradhan Commercial Pvt. Ltd.) for the alleged violations. The violations alleged were that VCPL had acquired veto rights in RRPR and NDTV indirectly over the 26% shareholding held by RRPR and NDTV which resulted in the acquisition of “control” in RRPR and indirect control in NDTV by VCPL. Further, VCPL on account of indirect acquisition failed to make a public announcement of an open offer in terms of Regulation 12 read with Regulation 14(3) of the SAST Regulations, 1997.
WTM (Whole Time Members of SEBI) concluded that non-compete clause in the agreement is generally found in share purchase agreement and not under the loan agreement and, therefore, such non-compete clause points out to a controlling stake in NDTV. The WTM, therefore, concluded that the loan transaction was used to shroud the true nature of the transaction and the entire purpose was to acquire control.
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