Investigations Department 


Order u/s 11 B and 11 and Regulations 44 and 45 of the SEBI(Substantial Acquisition of Shares and Takeovers) Regulations 1997 against 

M/s Kosha Investment Ltd pursuant to investigations in the matter of Snowcem India Ltd.

Pursuant to investigations it was observed that Kosha Investment Ltd. (KIL- the acquirer) acquired 11,36,700 shares of Snowcem India Ltd ( SIL- the target company) during the period (June 1999 to August 1999) constituting 10.81% of the paid up capital of SIL (i.e. more than the stipulated percentage of 5%). KIL was already holding more than 15% of the voting capital of SIL immediately prior to the acquisition from the market. Therefore, it was concluded that KIL was liable to make public announcement in terms of Regulation 11(1) of the said Regulations.
 
In exercise of the powers under Section 19 read with Section 11B of SEBI Act read with regulations 44 and 45 of the said Regulations, the Acquirer viz. Kosha Investments Ltd has been directed to make public announcement in terms of regulation 11(1) of the said Regulations taking June 29, 1999 as the reference date for calculation of offer price. The public announcement shall be made within 45 days of passing of the order.
 
Further, in terms of Regulation 22 (12) of the said Regulations, the payment of consideration to the shareholders of the Target Company has to be paid within 30 days of the closure of the offer. The maximum time period provided in the said Regulations for completing the offer formalities in respect of an open offer is 120 days from the date of public announcement. The public announcement in the instant case ought to have been made taking June 29, 1999 as the reference date and thus the entire offer process would have been completed latest by October 27, 1999. Since no public announcement for acquisition of shares of the Target Company has been made, which has adversely affected interest of shareholders of Target Company, it was found just and equitable to direct the Acquirer viz. Kosha Investments Ltd to pay interest @ 15% per annum on the offer price. The Acquirers have been directed to pay interest @ 15% per annum to the shareholders for the loss of interest caused to the shareholders from October 28, 1999 till the date of actual payment of consideration for the shares to be tendered and accepted in the offer to be made by the Acquirers.
 
An earlier order dated December 03, 2003 passed by SEBI restraining the Kosha Investments Ltd from buying, selling or dealing in securities in any manner, directly or indirectly, for a period of two years for violating the provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 shall not hamper the implementation of this order.