March 19, 1999
PR No. 76/1999

Acquisition of 48.47% of the voting capital of M/s. Annapurna Industrial Resources Limited


Mr. Iqbal Singh Anand, Mr. Prithipal Singh Anand, alongwith their associates (the acquirers) made a public announcement of a public offer under Regulation 9 and Regulation 12 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1994. In terms of the public announcement the acquirers had sought to acquire 48.47% of the then existing voting capital of M/s. Annapurna Industrial Resources Limited (the target company) from the equity shareholders. 
As per the Public Announcement, the offer was to open on 25/10/96 and close on 7/12/96 and M/s Netwest Finance Limited, a Merchant Banker, had been appointed as Manager to the offer. On 22/10/96, SEBI received a draft offer document in respect of the offer from the Manager to the offer. In the due course of processing the draft offer document, the Manager to the offer informed SEBI that the offer had already opened and closed. Meanwhile, the registration of the Merchant Banker expired on 15/1/97 and the same had not been renewed. 
SEBI, therefore, advised the acquirers to inform SEBI the steps taken for the completion of the offer formalities and the status of the offer, in response to which the acquirers informed SEBI that all steps had been taken for completion of the offer and payment had been made by bank drafts to the shareholders whose shares were accepted and that the acquired shares have been transferred in the name of the acquirers. 
It was found that the acquirers had committed the following violations:

  • The offer document was dispatched without SEBIís approval.

  • The minimum offer price was not fixed in accordance with the provisions of the regulations since the shares of the target company did not have a continuous market.

  • Delay in payment of consideration to the shareholders who had accepted the offer.

Taking into consideration the facts, the totality of the circumstances, the interests of the shareholders who have accepted the offer, SEBI directed the acquirers, to pay the shareholders whose offers were accepted @ 15% p.a. on the consideration paid, for the delayed period, except in the cases where the interest involved is below Rs.100/- or where addresses of tenderers have changed subsequently and not traceable now, within 15 days from the date of the order. The balance amount (i.e. the difference between Rs.55,000/- and paid as aforesaid), was directed to be deposited to the credit of the Investor Protection Fund of the Regional Stock Exchange where the shares of M/s Annapurna Industrial Resources Ltd. are listed.