Sebi Debars Ankur Acquirers From Market

The Securities Exchange Board of India (Sebi) has evoked the provisions of Section 11B of the Sebi Act, 1992 and has debarred the Brij Kishore Maheshwari, Raj Kishore Maheshwari and others from accessing the capital market and from dealing directly or indirectly in securities for five years.

Sebi order follows the failure on part of these acquirers to meet the stipulated guideline for the takeover of Ankur Drugs and Pharma, formerly known as Mridol Pharmaceuticals.

Brij Kishore Maheshwari, Raj Kishore Maheshwari and others (collectively referred as acquirers) had made a public announcement on April 1, 1998 in terms of Sebi (Substantial Acquisition of Shares And Takeovers) Regulations, 1997 to acquire 16,61,000 equity shares representing 20 per cent of the voting capital of Ankur Drugs at Rs 5.50 a share. The public announcement was made pursuant to agreements dated March 28, 1998 entered by the acquirers with Lalit Agrawal & others, his friends, relatives and associates to acquire 29,87,400 equity shares representing 31.45 per cent of the voting capital of the target company. The open offer was to open on May 18, 1998 and close on June 17, 1998.

With the permission to act as merchant banker to the offer was not granted to Mid East Portfolio Management (MEPL), who were appointed by the acquirers for the purpose, acquirer appointed Keynote Corporate Services Ltd. (KCSL) as merchant banker to the offer. Meanwhile, the agreements dated March 28, 1998 was terminated by the acquirers and KCSL disassociated themselves from the said offer.

Sebi's enquiry regarding termination of agreement, KCSL replied that no specific reason for termination has been informed to them. The acquirers when advised to apprise Sebi of the factual position of the offer replied that the offer was withdrawn due to, inter-alia, non-receipt of no-objection certificate from the bankers. On subsequent investigation, the acquirers informed that in terms of the regulations no public offer once made shall be withdrawn.

A showcause notice issued to the acquirers on August 30, 2000 was returned undelivered. On June 7, 2001 Rajkishore Maheswari, appeared for the hearing before the Sebi chairman and orally submitted that he would complete the offer formalities and comply with the regulations. But the written submissions dated August 14, 2001 were not in consonance to the oral submissions.

Further, there was violation of regulation 22(10) read with Regulation 28(5) as a result of failure to open an escrow account by the acquirers in favour of the merchant banker as envisaged.

Sebi has also directed the acquirers to pay all shareholders of the target company who accept the offer of the acquirers as and when completed along with interest at 5 per cent p.a. from July 16, 1998 till the actual date of payment of consideration to such shareholders.