Mumbai: Market regulator Sebi has exempted the promoters of Prima Industries Ltd from making an open offer with respect to their shareholding going over 71 percent due to forfeiture of certain shares.
Securities and Exchange Board of India (Sebi) said that there is no direct acquisition of voting rights or shares in Prima Industries by the promoters and the increase in percentage of voting rights would be on account of forfeited shares.
After forfeiture, promoters' shareholding in the company would rise to 71.36 percent from 60.13 percent. The increase would trigger the need for making an open offer under Sebi takeover regulations.
Providing the exemption, Sebi in an order dated March 11 said these shares have to be forfeited in the interest of the target company and its shareholders in accordance with the provisions of the Articles of Association and the Companies Act, 1956.
Noting that there would not be any change in the control or management of Prima Industries, the order said that after forfeiture of 20,16,100 equity shares, the public shareholding would still be in compliance with norms.
One of the company's promoter Sanjay Gupta on behalf of the promoter group had filed an application seeking exemption with Sebi on August 24, 2012.
The management of the company has decided to recover the outstanding amount from the shareholders who have failed to make the shares fully paid up. Despite the final reminder, shareholders holding 20,16,100 equity shares for Rs 1,00,80,500 have failed to make the shares fully paid up.
Therefore, the firm decided to forfeit the shares of those shareholders who defaulted.