Jyoti Ltd approaches Sebi to probe stake purchase by FIIs

Electrical and hydraulic equipment maker Jyoti Ltd has requested capital market watchdog SEBI to initiate probe into two Mauritius-based FIIs acquiring 9.69 per cent shares in the company.
Talking to reporters here late last evening, company's chairman and managing director Rahul Amin said that one of the investors hold 4.9 per cent, while the other has a control over 4.79 per cent share.
Amin added, "It is already widely known fact that a lot of unaccounted money ...Invested in this country through Mauritius by use of FIIs as front vehicle. That is why we have complained to SEBI, concerned authorities of the Union Finance Ministry and a special investigate team constituted by the Supreme Court."

This is "to find out the real beneficial owners behind these two Mauritius-based FIIs who do not have apparently seem to have invested in any other company of repute", he said.
In the present case, apparently both these investors are also being used to circumvent the SEBI takeover norms, Amin added.
He also requested to investigate into the role of a former director of the company who had accumulated shares of Jyoti Ltd indirectly in third party names and used both these Mauritius-based investors for this purpose.

Last week, Jyoti Ltd had informed the BSE that "the Company and one of its Promoters had entered into a Shareholders' Agreement (SHA) dated September 14, 2010 with Finquest Financial Solutions Private Limited (FFSPL). By virtue of this Agreement and subject to the fulfillment of the terms and conditions contained therein, the Company allotted 18,00,000 Equity Shares to FFSPL and its group on preferential basis".

The SHA was unilaterally terminated by FFSPL vide their e-mail dated March 17, 2014. A further letter dated March 25, 2014 by FFSPL to the Company reconfirmed the action of termination.
The Board of Directors of the Company at their Meeting held on November 10, 2014 considered the consequences of the termination of the SHA and came to a conclusion that the termination of the SHA would take away all rights of FFSPL, its group and any other person in respect of the shares which were issued by the Company by virtue of the SHA to FFSPL and group.