September 03, 2004
PR No. 210/2004

In the matter of acquisition of shares and control by M/s. Sterling Investment Corporation Private Limited, M/s. Shapoorji Pallonji and Company Limited and M/s. Cyrus Investments Limited in M/s. Fal Industries Limited

An order dated August 31, 2004 was passed by Shri T.M. Nagarajan, Whole Time Member, directing that adjudication proceedings be initiated against M/s. Sterling Investment Corporation Private Ltd., M/s. Shapoorji Pallonji and Company Ltd. and M/s. Cyrus Investments Ltd. (Acquirers) in respect of delay in compliance with provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (Regulations) in matter of acquisition of shares and control in M/s. FAL Industries Limited (FAL). 
 
As per the aforesaid order, when the Acquirers made a public announcement on October 15, 2001 in terms of the Regulations to acquire shares of M/s. Forbes Gokak Limited (Forbes), they not only decided to acquire voting rights and control over Forbes but also decided to acquire shares/ voting rights/ control indirectly over FAL. Therefore, they ought to have made a public announcement to acquire shares/ voting rights/ control to the shareholders of FAL also in terms of Regulations on October 15, 2001.
 
However, notwithstanding the fact that Acquirers contested the allegations contained in the Show Cause Notice issued by SEBI in this regard for violation of Takeover Regulations, the Acquirers made a public announcement voluntarily on October 11, 2003 to acquire further shares of FAL. Thus, they complied with the regulatory requirement in so far as it relates to public announcement for acquiring shares from the public consequent on acquiring control over FAL, though the said open offer ought to have been made within the time specified in the Regulations. Thus for the delay in compliance with the regulatory requirement, Whole Time Member has directed to initiate adjudication proceedings against the Acquirers under section 15H of the SEBI Act, 1992. 
  
 
Mumbai
 
September 3, 2004